KUALA LUMPUR (April 29): Digi.Com Bhd said on Friday (April 29) that its first-quarter net profit dropped to RM236.15 million from RM264.83 million a year earlier as revenue declined on lower prepaid segment income and as the group registered a tax rate increase from 24% to 33% due to the implementation of Malaysia's one-off Cukai Makmur or Prosperity Tax for 2022.

The Prosperity Tax aims to finance the country's efforts to manage the Covid-19 health crisis.

In a statement to Bursa Malaysia, Digi.Com said its group revenue fell to RM1.52 billion for the first quarter ended March 31, 2022 (1QFY22) from RM1.55 billion a year earlier.

The mobile telecommunications network provider also declared its first interim tax-exempt dividend of 2.9 sen a share for FY22. The dividend's ex and payment dates fall on May 30 and June 24 respectively.

"[During 1QFY22,] prepaid revenue declined by 3.9% year-on-year (y-o-y) and 1.6% quarter-on-quarter (q-o-q) to RM615 million as a result of weaker acquisition and demand for Internet passes and lower non-Internet usage. Digital revenue was down 25% y-o-y and 10.4% q-o-q to RM60 million as we reduced our focus on the lower-margin segment.

"Postpaid revenue strengthened by 2.6% y-o-y and 0.6% q-o-q to RM633 million, driven by continued subscription growth and effective churn management," Digi.Com said.

The company's number of subscribers in the postpaid segment rose, while its number of prepaid subscribers fell.

"The postpaid segment sustained its growth momentum, expanding its subscriber base by 249,000 y-o-y and 42,000 q-o-q to 3.34 million users via quality acquisitions, a low churn rate and a growing base opting for attractive smart bundles and entry-level plans.

"The prepaid base narrowed by 258,000 y-o-y and 119,000 q-o-q to 6.9 million in a highly competitive market, where Digi prioritised acquiring higher-value subscribers attracted by our leading network position," the company added.

Looking ahead, Digi.Com said it remains focused on executing its strategic priorities to deliver on its 2022 guidance of returning to service revenue growth and sustained earnings before interest, taxes, depreciation and amortisation (EBITDA) while continuing to innovate and accelerate modernisation, expand its mobile telecommunications network and deepen its responsible business commitments.

Looking back, the company said that in 1QFY22, "overall macroeconomic development improved with signs of recovery in retail and commercial activities,  supported by the opening of international borders".

At 4.09pm on Friday, Digi.Com had slipped three sen or 0.78% to RM3.83, giving it a market value of RM29.8 billion.

The company has 7.78 billion outstanding shares, according to the latest quarterly financial report.