This article first appeared in The Edge Financial Daily on April 23, 2019

KUALA LUMPUR: DiGi.com Bhd’s first-quarter net profit fell 11.6% to RM341.5 million from RM386.11 million a year ago, due to depreciation cost of RM216 million and RM22 million in finance cost.

As a result, earnings per share fell to 4.39 sen for the first quarter ended March 31, 2019 (1QFY19) from 4.97 sen for 1QFY18. Quarterly revenue dropped 7.7% to RM1.51 billion in 1QFY19 from RM1.63 billion a year ago.

Service revenue for 1QFY19 came in within its guidance of RM1.393 billion at RM1.39 billion, down 4.7% from RM1.46 billion in 1QFY18.

Nevertheless, DiGi declared a first interim dividend of 4.3 sen per share amounting to RM334 million for the financial year ending Dec 31, 2019 (FY19), payable on June 28.

In a statement yesterday, DiGi said post-paid revenue for 1QFY19 grew 13.5% year-on-year (y-o-y) to RM671 million. Post-paid Internet revenue rose 25.3% y-o-y to RM461 million. Post-paid average revenue per user (Arpu) remained steady at RM71.

Prepaid Internet subscriber strengthened 98,000 y-o-y to 6.5 million or 76.9% of subscriber base. Prepaid Internet revenue increased 2% y-o-y to RM401 million or 52.1% of prepaid revenue.

“Overall, the Internet subscriber base stood healthy at nine million or 80% of subscriber base, up 391,000 from a year ago. Data traffic volumes surged 51% y-o-y and monthly data usage among our subscribers increased to 10.2GB,” said DiGi.

DiGi also said it had invested RM168 million in capital expenditure (capex) or 12.1% of service revenue, mainly for capacity upgrades and fibre network expansion, the deployment of network function virtualisation and LTE-Advanced network coverage to 67% of the population.

“We have focused on building a strong post-paid portfolio and a wide range of Internet offerings to give customers a full control over their digital experiences,” said DiGi chief executive officer Albern Murty.

“We also made strategic decisions to shift the subscriber mix and channel strategy for our prepaid business to drive growth from Internet uptake and reduce dependency on legacy voice services.

“Despite competition in the market, we are positioning DiGi for long-term growth by improving the prepaid sustainability, driving further post-paid growth, investing in our network, and creating digital platforms to add value for customers while executing a disciplined strategy focused on growth, efficiency and digital transformation.”