Digi posts lower net profit for 3Q21

The lower earnings are mainly due to higher depreciation and amortisation costs from a higher intangible and ROU assets base 

By S BIRRUNTHA / Pic TMR

DIGI.COM Bhd’s net profit for the third quarter ended Sept 30, 2021 (3Q21), fell 2.48% to RM312.82 million from RM320.76 million a year earlier. 

In a filing to Bursa Malaysia yesterday, the group said the lower earnings were mainly due to higher depreciation and amortisation costs from a higher intangible and right-of-use (ROU) assets base, alongside higher net one-off effects in 3Q20 versus 3Q21. 

However, Digi said revenue for the quarter rose to RM1.58 billion from RM1.57 billion a year ago underpinned by improved momentum in postpaid and core prepaid segments. 

The group’s earnings per share for the period were 4.02 sen compared to 4.13 sen previously. 

For the nine months ended Sept 30, 2021 (9M21), Digi said its cumulative net profit fell to RM857.55 million from RM940.79 million a year earlier while revenue was higher at RM4.75 billion from RM4.59 billion. 

On a quarterly basis, the group said its 3Q21 profit after tax was lifted by 11.8% to RM312.82 million from the preceding quarter contributed by a lower depreciation and amortisation, and sustained net finance costs.

According to Digi, its postpaid revenue strengthened to RM633 million, up 1.1% year-on-year (YoY), the highest in five quarters as the group’s number of post-paid service subscribers rose to 3.25 million from 3.02 million, reflecting its strategic efforts to drive data monetisation as well as delivering sustainable subscriber and revenue mix. 

While its prepaid revenue saw a stable quarter-on-quarter performance, largely attributed to the growth in the Malaysian segment and continued data usage growth, (albeit a YoY reduction of -3.4%) to RM645 million. 

As such, the group said the Internet and digital revenue mix strengthened to 77.5% of service revenue. 

Meanwhile, Digi has declared a tax-exempt dividend of four sen per share for 3Q21, as it noted that the dividend’s ex and payment dates fall on Nov 17 and Dec 17 this year respectively. 

Commenting on the results, Digi CEO Albern Murty said the group continues to invest and deliver on its network experience to better serve its customers, while sustaining efforts to drive societal recovery. 

“On this front, we are pleased to report that 100% of our retail frontliners at Digi Stores are fully vaccinated against Covid- 19, thus enabling us to serve customers safely while keeping our employees protected,” he said in a separate statement. 

In 3Q21, Digi had invested RM170 million capital expenditure in network capacity enhancements and digitalisation of operations, as part of the company’s priority to deliver quality Internet experience to its customers to meet rising data consumption. 

Its monthly average data usage currently stands at 22.4GB per user.

Moving forward, Digi said it will continue to execute its strategy which focuses on strengthening mobile offerings and digital services for subscribers to benefit from growing digital opportunities. 

The group added that it remains highly committed to continuing its effort to support societal recovery from Covid-19 and to expand the widest mobile telecommunication network coverage in rural areas. 

As the operating and retail environment is gradually returning to normal conditions, Digi said it is also revising, among others, its financial year 2021 guidance to a low single-digit decline for service revenue and low-to-mid single-digit decline for Ebitda. 

“Lastly, the proposed transaction relating to the prior-announced proposed merger between Celcom Axiata Bhd and Digi Telecommunications Sdn Bhd is progressing as planned. The completion of the proposed transaction is subject to receipt of regulatory approvals, approval by all shareholders, and other customary terms and conditions. 

“Expected dates for approval and completion of the transaction within the 2Q22 remain unchanged,” it noted. 

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