Maxis posts RM397 mil in net profit, revenue eases to RM2.21 bil

The fall in service revenue was largely contributed by the termination of a network sharing agreement, among other factors. (AP pic)

KUALA LUMPUR: Maxis Bhd’s net profit stood at RM397 million for the second quarter ended June 30, 2019 (Q2 2019) compared with RM478 million posted in the same period last year.

Revenue eased to RM2.21 billion from RM2.23 billion previously, mainly dragged by service revenue which slid to RM1.92 billion versus RM2.01 billion a year ago.

In a filing with Bursa Malaysia today, the telecommunications giant said the fall in service revenue was largely contributed by the termination of a network sharing agreement, decline in prepaid revenue-generating subscribers (RGS), and an overall reduction in prepaid and postpaid average revenue per user (ARPU).

“But the fall was offset by the growth in postpaid and home fibre subscribers which saw a solid 10.8% increase in subscriber base of 3.10 million in Q2 2019 from 2.80 million in Q2 2018,” it said.

It added postpaid ARPU for the quarter decreased to RM91 from RM96 in Q2 2018, largely due to the change in the mobile termination rates (MTR) and ARPU dilution from Hotlink Postpaid Flex offerings.

Maxis said the prepaid service revenue declined 7.4% to RM791 million in Q2 2019 from RM854 million a year ago on the back of a lower subscription base, which was due to continued SIM consolidation, migration from prepaid to postpaid, and reduced MTR.

“Subscribers decreased by 330,000 to 6.42 million in Q2 2019 from 6.75 million in Q2 2018,” it said.

Data consumption continued to increase year-on-year in both postpaid and prepaid plans, with postpaid monthly average data usage for the quarter was 13.3GB, an increase from 11.2GB posted a year ago, while prepaid monthly average data usage for the quarter was 13.7GB, a significant increase from 8.2GB recorded for the same period last year.

For the quarter under review, the normalised earnings before interest, taxes, depreciation and amortisation (Ebitda) declined 6% to RM947 million from RM1.01 billion in the same period a year ago, while normalised EBITDA margin on service revenue was 49.4% compared with 50% in Q2 2018.

“Capital expenditure for the current quarter was higher at RM267 million from RM212 million in Q2 2018, mainly due to incremental investment for home fibre and enterprise growth.

“Operating free cash flow for the current quarter was RM1.02 billion, compared with RM931 million in Q2 2018 due to improved working capital management and productivity programmes delivering results,” it said.

Meanwhile, in a separate statement, chief executive officer Gokhan Ogut said the quarter saw Maxis making headway in its converged ambitions with the launch of new fibre speeds, delivering smart solutions for enterprises and championing Industry 4.0 initiatives, in line with the government’s digital economy agenda.

“The potential of 5G in future smart solutions is tremendous. To this end, our 5G live trials are progressing well,” he said.