Celcom 2Q earnings improve amidst industry challenges

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KUALA LUMPUR (Sept 12): Celcom Axiata Bhd continued its stellar performance amidst a challenging competitive environment and saw its second quarter ended June 30, 2017 (2QFY17) normalised profit after tax, amortisation and minority interests (PATAMI) increase 3.4% to RM331 million, from RM320 million a year earlier, due to its portfolio rationalisation in 2QFY17.

The company, a unit of the Bursa-listed Axiata Group Bhd, however saw its total revenue fall 3.63% to RM1.62 billion, from RM1.68 billion previously, due to the absence of major device launches. 

Meanwhile, service revenue clocked in flat at RM1.49 billion, from RM1.48 billion a year ago, contributed by its postpaid segment which has increased in revenue of about 8.2% year to date. 

For the quarter under review, Celcom saw a 3.1% decline in its subscriber base to 9.93 million, from 10.25 million in 1QFY17.

Its deputy chief executive officer Azwan Khan said despite industry challenges, Celcom continued to stabilise with strong overall data performance this year.

Its data revenue soared 27.6% year-on-year (y-o-y) to RM706 million.

Azwan said there was slight increase in service revenue market share at 0.5% versus the two telcos — Digi and Maxis.

"We have pretty good results in this quarter under review. We have probably grown our revenue share, compared with some others [the top two telcos]. In terms of industry revenue growth, it has shrunk by 0.2% but our mobile service revenue improved by 1.4%.

"As a result, Celcom's revenue market share increased by 0.5% amidst stiff competition," he told reporters at a media briefing today. 

Celcom's data consumption rose 23.2% quarter-on-quarter (q-o-q) to 6.2GB per month per active data user, compared with 5.0GB, supported by a higher smartphone penetration of 69% from 66% q-o-q.

For network updates, Celcom is targeting to improve its network experience to achieve 85% LTE population coverage by year end, from 75% currently. 

"For the next two quarters, we could be ramping up the roll out of our network to enhance our network experience.

"We are lagging behind for 4G population coverage, compared to others. Having said that, I bet the competition [is] going to increase over time," said its chief financial officer Jennifer Wong.