Celcom’s first half net profit down 2.8% to RM1.03b

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KUALA LUMPUR (Sept 10): Celcom Axiata Bhd posted a net profit of RM1.03 billion for the half-year ended June 30, down 2.8% from RM1.06 billion a year ago.

Christopher Tiffin, Celcom’s chief financial officer, said the fall was due to an absence of tax incentives in 1HFY14.

“In 1HFY13, we had quite a few tax incentives that we don’t have this year, and that is the key component of the reduction,” he said at a media briefing today.

Revenue for 1HFY14 fell 3.4% to RM3.86 billion, from RM3.99 billion in 1HFY13.

Meanwhile, second quarter net profit grew 0.6% to RM518 million, from RM515.3 million in 1QFY14, while revenue rose 2.1% to RM1.95 billion, from RM1.91 billion.

CEO Datuk Sri Shazalli Ramly said Celcom is still undergoing its transformation exercise, which is expected to be completed by the end of this month.

"As part of any major transformation of this sort, some business interruption is expected, because it takes some time to operationalise the new and improved processes and systems in the business.

"We have completed the two-year project and are at the tail-end of the stabilisation period," Shazalli said.

For the remaining part of the current year, Celcom will focus on enhancing its network quality, which includes its long-term evolution (LTE) advancement and network optimisation programme.

The company has thus far spent about RM300 million of its allocated capital expenditure of RM1 billion for 2014, and will be ramping up spending in the second half of the year.

“You will see that there will be an increase in terms of capex in 3QFY14 and 4QFY14, as at the moment, we have quite a few projects that are ongoing to optimise the network and to improve the network quality,” said Shazali.

The company will be introducing its next five-year programme, which will span from 2015 to 2020, during its 4QFY14 results briefing, he said.