DiGi.Com 2Q net profit falls 6.9%, declares 5.9 sen dividend

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KUALA LUMPUR (July 13): DiGi.Com Bhd saw its net profit fall 6.9% to RM464.36 million or 5.97 sen a share for the second quarter ended June 30, 2015 (2QFY15) from RM498.91 million or 6.42 sen a share a year ago, due to higher depreciation and amortisation charges as well as higher tax expenses.

In a filing with Bursa Malaysia today, the mobile service provider said revenue for the quarter also dropped by a marginal 1.3% to RM1.72 billion from RM1.75 billion in 2QFY14 due to competition intensity in international direct dial (IDD) services as well as post-goods and services tax (GST) implementation confusion.

Nevertheless, DiGi.Com declared a second interim dividend of 5.9 sen totalling RM459 million for the financial year ending Dec 31, 2015 (FY15), payable on Sept 4, 2015. This brings its total dividend to 12.14 sen per share for the year.

For the six-month period (6MFY15), DiGi.Com's net profit came in at RM943.58 million or 12.14 sen a share, 4.1% lower compared with RM984.07 million or 12.66 sen a share a year ago. This is despite revenue for the period strengthened by 1.44% to RM3.51 billion from RM3.46 billion.

In a statement today, DiGi.Com chief executive officer Albern Murty said it will continue to expand its 1800 Mhz and 2600 Mhz spectrum for Long Term Evolutiuon (LTE) to enable more customers to enjoy access on the LTE-enabled devices, in addition to boosting capacity and improving indoor coverage.

"We understand customers demand reliable and consistent experiences on our network, and this has been our core focus," he added.

"Over the years, we've ploughed significant investments into building a brand new network and in rapidly rolling out our high speed network in more areas around Malaysia, while keeping a strong focus on quality of service to ensure more customers can enjoy the best mobile internet experience," Albern said.

Albern said DiGi.Com has spent RM200 million during 2QFY15, primarily to boost data network coverage and quality and over RM2.3 billion has been spent as capital expenditure in the last 3 years.

As of June 30, 2015, DiGi.Com's 4G-LTE network coverage reached more than 65% population across all the five key market centres, with the Klang Valley and Kota Kinabalu at 79% and 78%, respectively.

Consequently, its customer base growing to 11.8 million primarily bolstered by a solid increase in its postpaid subscribers. Internet subscribers also steadily rose to 57.9% or 6.8 million of its total customers, with the quantum of smartphones on its network expanding to 57.1% in 2QFY15.

Going forward, Albern said in the second half of this year, the group will build on the solid 4G LTE momentum with an ambition to continue expanding its reach to more areas nationwide to ensure even more customers enjoy quality experience on its network.

"We will also continue to strengthen our products and services value proposition, and introduce new digital innovation to encourage adoption and stimulate usage on our high-speed network," he added.

As at 2.57pm, shares in DiGi.Com (fundamental: 1.55; valuation: 1.7) were traded down 0.18% at RM5.52 today, giving it a market capitalisation of RM42.996 billion.

(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.)