DIGI (6947) - DiGi 2Q net profit falls 9.4%, pays 5.4 sen dividend

KUALA LUMPUR (July 11): DiGi.Com Bhd saw its net profit for the second quarter ended June 30, 2016 (2QFY16) fall 9.4% to RM420.61 million or 5.41 sen per share due to an unrealised foreign exchange and derivatives losses of RM12.72 million.

It posted a net profit of RM464.36 million or 5.97 sen per share a year ago.

Revenue for the quarter came in 3.9% lower at RM1.66 billion from RM1.72 billion.

Despite lower quarterly earnings, DiGi declared a second interim dividend of 5.4 sen per share amounting to RM420 million for the financial year ending Dec 31, 2016 (FY16), payable on Sept 30. This brings its year-to-date dividend to 10.5 sen per share compared with 12 sen per share in the same period last year.

For the cumulative six months period (1HFY16), the company posted a 13.1% decline in net profit at RM819.65 million or 10.54 sen per share as compared to RM943.58 million or 12.1 sen per share in 1HFY15.

Cumulative revenue was 5.7% lower at RM3.31 billion from RM3.51 billion.

In a statement today, DiGi said its earnings before interest, tax, depreciation and amortisation (ebitda) fell 6.7% year-on-year (y-o-y) to RM735 million in 2QFY16, while ebitda margin slid 1.3 percentage points to 44%.

Its service revenue also dropped 2% y-o-y to RM1.56 billion, eventhough its active internet subscribers rose to 8 million alongside with increase of smartphone penetration to 62% while 4G LTE subscribers grew to 3.3 million from 1.3 million, a year ago.

Internet revenue made up a total of 36.1% of the service revenue for 2QFY16 and continued to grow as smartphone adoption rose to 62% and active internet subscribers to 64.5% of total subscriber base. Average revenue per user (ARPU) steady at RM42 backed by 12.3 million subscribers, it added.

Despite challenged by the industry's aggressive internet quotas and heavy discounts, DiGi's postpaid ARPU strengthened to RM82 over a larger subscriber base, while prepaid ARPU dipped marginally to RM34 on the back of relatively stable prepaid subscribers.

DiGi chief executive officer Albern Murty said during 2QFY16, the group had intensified its network service quality and coverage, where its 4G LTE and 4G LTE-A network footprint now stands at 76% and 34% of the population nationwide, respectively.

While the upfront spectrum fees for the allocated 900Mhz and 1800Mhz band have yet to be announced by the regulator, DiGi said it believes the "fee structure would be rationale".

"For FY16, we aim to sustain service revenue and ebitda margin at 2015 while managing capital expenditure within 13-14% of the service revenue with increased leverage on global and collaboration synergies to drive efficient and scalable investments," it added.

Shares in DiGi.Com was traded at RM4.76, gained one sen or 0.21% after 2.1 million shares exchanged. The current price gives it a market value of RM37 billion.

DIGI (6947) - DiGi 2Q net profit falls 9.4%, pays 5.4 sen dividend