PETALING JAYA: Telecommunications group Maxis Bhd eked out a 2.5% increase in net profit for the second quarter ended June 30, 2023 (Q2 FY2023) to RM330 million from RM322 million in the quarter a year ago.
The growth was attributed to higher service revenue, discontinued prosperity tax and prudent capital expenditure (capex) investments, according to its Bursa Malaysia filing today.
Revenue rose 1.98% to RM2.47 billion from RM2.42 billion in Q2 FY2022.
Earnings per share edged up to 4.2 sen from 4.1 sen a year ago. The group declared a second interim dividend of 4 sen per share, payable on Sept 29.
Despite a demanding operational landscape, the group saw a 3.2% year-on-year (y-o-y) rise in service revenue (excluding wholesale voice) to RM2.11 billion, driven by healthy growth from both consumer and enterprise businesses.
The postpaid segment jumped 7.5% to reach RM871 million, fuelled by elevated Maxis Postpaid and Hotlink Postpaid subscriptions which rose by 6.3% to 3.4 million.
In contrast, there was a 4.1% decline in prepaid revenue to RM651 million. However, the ongoing acceptance of Hotlink Prepaid plans played a role in preserving a robust customer base of 5.7 million amidst the challenging landscape of the prepaid market.
Enterprise revenue (excluding wholesale voice) was up 3.4% to RM362 million.
For the quarter, Maxis spent RM166 million on capital expenditure (capex) which it deemed “prudent” following the maturity of its 4G network.
Nonetheless, expenditures for the quarter were RM75 million lower compared to the same period last year, when total spending reached RM241 million.
Earnings before interest, taxes, depreciation, and amortisation (Ebitda) saw a RM10 million decline, attributed to reduced universal services provision income after project completions this year.
Meanwhile, earnings before interest and taxes (EBIT) experienced a RM29 million drop, primarily influenced by amortisation expenses related to spectrum and software.
Nonetheless, there was a slight increase in post-tax profit to RM329 million, up from RM322 million in the previous year, aided by the cessation of the prosperity tax in 2023, which helped mitigate the impact of the EBIT decrease.
Maxis witnessed a 10.7% increase in its home connectivity segment’s customer base, driving the total number of home connections to 706,000 and propelling a 9.6% increase in revenue, amounting to RM229 million.
Year-to-date, the group achieved a cumulative net profit of RM650 million from RM611 million recorded in the previous year. Revenue for the six months rose to RM5 billion compared to RM4.83 billion in the corresponding period last year.
Exploring 5G technology
Maxis CEO Goh Seow Eng said focus will always be on customer experience in terms of products, services, network and digitalisation.
“Very soon, we will offer 5G plans with attractive value for all segments,” he said.
Last month, Maxis revealed its plans to execute the access agreement with Digital Nasional Bhd (DNB), which is driving the development of 5G infrastructure in Malaysia.
The execution of the agreement, contingent upon shareholders’ endorsement during the extraordinary general meeting scheduled for Aug 14, is to secure wholesale access to 5G products and services.
“Maxis welcomes the government’s decision on May 3, 2023 to transition towards a two 5G network model, and will provide our support for DNB to achieve its target of 80% coverage of populated areas by end-2023,” said the group.
Key initiatives for Maxis include the implementation of the software-defined wide area network (SD-WAN) for Johor Plantations Bhd and collaboration with Boustead Petroleum involving the integration of the SD-WAN system into payment terminals across Peninsular Malaysia as part of its digitalisation initiative.
At the close of trade, Maxis’ share price was up 1.02% or 4 sen at RM3.98, giving it a market capitalisation of RM31.2 billion.