DiGi reports lower first quarter net profit despite revenue increase

26 Apr 2012

Malaysia’s DiGi Telecommunications saw a lower net profit in the first quarter of 2012 compared to the same period a year earlier, despite recording higher revenues year-on-year. For the three months ended 31 March 2012 DiGi posted a net profit of MYR320.63 million (USD104.5 million), down from MYR331.4 million in 1Q11, and significantly lower than the MYR394 million net profit it reported in 4Q11. The telco noted that the decline against the last quarter of 2011 could be attributed in the main to ‘prior years’ tax incentives related to mobile broadband network facilities which resulted in significantly lower effective tax rate in Q411’. Total turnover, meanwhile, increased by 9.6% in the first quarter of 2012 compared to the year-ago period, to MYR1.569 billion, mainly driven by data revenue, which DiGi said accounted for close to 31% of total revenues. Earnings before interest, tax, depreciation and amortisation (EBITDA) and EBITDA margin stood at MYR737 million (1Q11: MYR657 million) and 47% respectively (45.9%), with the solid performance mainly attributed to what the operator called its ‘good cost discipline’ in the quarter under review.

Key to the operator’s financial performance, it has claimed, is its business transformation programme, which it says is aimed at bringing it closer towards enabling access to the internet for more Malaysians. The cornerstone of the programme is the complete modernisation of DiGi’s voice and data network, and the telco noted that around 500 sites have been successfully upgraded, while it said plans are now in place to increase the speed at which current sites are improved in the coming quarters. DiGi has also confirmed that it is aiming to complete the rollout of its new unified mobile network, dubbed ‘The Tomorrow Network’, by end-2012; the new infrastructure will offer 2G, 3G and 4G/LTE services from a single base station site. In addition, DiGi said that the initial rollout phase of the advanced network collaboration with local wireless operator Celcom had been completed, adding that upon conclusion of the entire project the two operators will share more than 4,000 sites nationwide.

At the end of March 2012 DiGi’s mobile subscriber base stood at 9.936 million, of which 83.% were signed up to pre-paid tariffs, while the operator claimed that some 5.3 million of its users were accessing mobile internet services.

Malaysia, Digi Telecommunications