KUALA LUMPUR (July 15): Maxis Bhd's second quarter revenue rose 1.3% to RM2.11 billion in the second quarter ended June 30, 2015 (2QFY15) from RM2.08 billion a year ago, on higher service revenue which grew 2.2% year-on-year.

However, net profit fell by a marginal 1.1% to RM441 million or 5.9 sen a share in 2QFY15 from RM446 million or 5.9 sen a share in 2QFY14 due to higher mobile telecommunication network operation cost and finance expenses.

Maxis registered an earnings before interest, tax, depreciation and amortisation (ebitda) of RM1.1 billion and an ebitda margin of 52.2%, against RM1.06 billion and 51.1% in the year-ago period.

The group also declared a second interim dividend of 5 sen per share for the financial year ending Dec 31, 2015 (FY15), payable on Sept 25, 2015.

In a statement today, Maxis (fundamental: 1.15; valuation: 1.1) said service revenue for Q2FY15 of RM2.09 billion was marginally lower than 1QFY15 of RM2.13 billion as its prepaid quarterly growth momentum was impacted by the recent goods and services tax (GST) implementation on the prepaid service.

Nevertheless, the number of revenue generating subscribers grew further in 2QFY15 to reach 12.2 million. Maxis now has 9.1 million mobile internet users and its smart-phone penetration stood at 65% in 2QFY15.

“Operationally and financially, it was a good quarter for Maxis, taking into account the early GST hiccups and the general impact of GST on prepaid. Our intense focus on unmatched customer experience and to provide the best network for data is rewarded with more and happier customers," said Maxis chief executive officer Morten Lundal in the statement.

The quarter also saw Maxis investing higher at RM260 million to support network modernisation, Long-Term Evolution (LTE) expansion and capacity upgrade to support traffic growth.

For the six months period (1HFY15), Maxis saw its net profit decline 8.5% to RM851 million or 11.3 sen a share from RM930 million or 12.4 sen a share a year earlier. However, revenue rose 1.4% to RM4.26 billion from RM4.2 billion in 1HFY14.

Going forward, Lundal said Maxis will continue with high capital expenditure (capex) for 2015 of at least RM1.1 billion to complete its network modernisation, drive 4G LTE expansion, as well as further improving capacity and quality.

"Maxis leads the 4G LTE population coverage in the country, approaching 41% of the population and covering key market centres and state capitals. The target is to reach over half of the Malaysian population by year-end.

"The ongoing process improvements and network performance have led to not only a larger customer base, but also happier customers, with one indication being the complaint level which is halved since last year and at the lowest level in over a decade," he added.

For FY15, the group is expecting service revenue growth in the low single digits, with ebitda at similar level as in FY14.

As at 2:33pm, Maxis shares were up 0.15% at RM6.51, for a market capitalisation of RM48.88 billion.

The stock has fallen 5% year to date, compared with the FBM KLCI's 2% decline.

(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.)