Celcom set to gain momentum

KUALA LUMPUR: Celcom Axiata Bhd, which has allocated nearly RM1 billion for capital expenditure (capex) for 2014, expects momentum to continue picking up with support coming from the Fifa World Cup this month and the Hari Raya festive season in July.
Speaking at a media briefing here yesterday, its CEO Datuk Seri Shazalli Ramly said the company expects its second and third quarters to record a sizeable gain as financial performance generally will be better during festive seasons.
Besides that, he said, data profitability is strong and there is a new area called enterprise solution, which should sustain its growth.
Celcom recorded a drop of 22.1% in net profit on a quarter-on-quarter basis for the first quarter ended March 31, 2014, impacted by lower tax incentive.
However, its net profit went up slightly 0.2% to RM515 million on a year-on-year basis despite revenue declining 3.6% to RM1.91 billion.
Net profit margin, meanwhile, stood at 27%, 1.0% higher than the same period last year.
Celcom has a subscriber base of 13.29 million, with average revenue per user stable at RM46.
Shazalli said Celcom, as the key contributor to Axiata Group Bhd, is on track to meet its key performance indicators (KPIs) given the trend in the first half of the year.
Axiata's KPIs include 10.1% and 1.8% growth in revenue and earnings before interest, taxes, depreciation and amortisation, while return on invested capital and capital employed are set at 9.3% and 7.8%, respectively.
Of the RM940 million capex allocation, RM400 million is to be spent on long term evolution (LTE), which is expected to nearly double its active 4G sites to 2,014 by year-end, compared with 1,093 sites currently. The remaining sum will be spent on information technology and network optimisation.
Commenting on the impact of goods and services tax which will be implemented starting April next year, Shazalli stressed that "we will keep our customers first" while supporting the regulations set by the government.
He did not indicate whether Celcom will be absorbing or passing on the tax .
On a separate note, he said Celcom will be announcing a number of senior management changes to rejuvenate the organisation next Tuesday.