KUALA LUMPUR (Feb 9): DiGi.Com Bhd's net profit grew 2.1% to RM560.1 million for the fourth quarter ended December 31, 2014 (4QFY14) from RM548.52 million a year earlier. Profit growth came on the telecommunication company's Internet subscriber growth and lower taxes.

 In a statement to the exchange today, DiGi (fundamental: 1.35; valuation: 2.1) said revenue increased to RM1.8 billion from RM1.73 billion. Profit before tax was lower at RM660.17 million versus RM683.32 million.

“Internet subscribers grew 31% year-on-year (y-o-y) to 6.4 million (2013: 4.9 million) from a stronger customer base of 11.4 million. The additional 1.5 million active internet subscribers accumulated during the year positively contributed to the increase in internet revenue, which rose 39.6% for the year, and paves the way for future service revenue.

"The group’s effective tax rates for the current quarter and financial year ended 31 December 2014 of 15.2% and 23.2% respectively are lower than the statutory tax rate of 25.0%, mainly due to the utilisation of broadband network-related tax incentives relating to prior years by one of the subsidiaries of the group," DiGi said.

Full-year net profit grew to RM2.03 billion from RM1.71 billion in the previous corresponding period. Revenue rose to RM7.02 billion compared to RM6.73.

DiGi proposed a dividend of 7.2 sen a share in 4QFY14, bringing full-year dividends to 26 sen a piece.

Digi noted that FY14 income growth was underpinned by data revenue, which accounted for 40% of group service revenue in 4QFY14.

FY14 data revenue grew 17.4% compared to FY13. The company attributed this to strong demand for Internet services, proliferation of a wider range of smartphones, and continuous expansion of coverage to more areas around Malaysia.

“Our focused effort in making Internet easily available and relevant to every customer has resulted in healthy increase in Internet adoption and significantly higher data traffic on our network which grew 86% y-o-y,”  DiGi chief executive officer Lars Norling said.

At 12:30pm, DiGi shares settled flat at RM6.47 for a market capitalisation of RM50.3 million, The stock had gained 5% this year versus the FBM KLCI's 3% gain.
 
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)