Maxis Q2 earnings fall 16.4%, declares 5 sen dividend

PETALING JAYA: Maxis Bhd's net profit declined 16.4% to RM478 million for the second quarter (Q2) ended June 30, 2018 compared with RM572 million in the previous corresponding period, due to lower revenue and higher operation cost.
Revenue was down by 3.8% to RM2.25 billion from RM2.34 billion.
The telco has proposed to declare an interim dividend of 5 sen per share for the quarter under review.
For the first six months of the year, Maxis registered a 6.8% drop in net profit to RM1 billion versus RM1.07 billion a year ago, while revenue contracted 4.8% to RM4.48 billion from RM4.71 billion.
Its service revenue stood at RM2.01 billion for Q2 2018, 2.7% lower than Q2 2017, mainly due to the decline in prepaid, which offset the growth in postpaid and home fibre business.
Postpaid service revenue grew 6.7% to RM1.01 billion, supported by the solid subscription base, which has continued to grow since Q3 2016 and has reached close to 3 million subscribers. Postpaid ARPU remained high at RM94.
Prepaid service revenue declined 13% to RM854 million on the back of a lower subscription base which was impacted by the continued SIM consolidation, migration from prepaid to postpaid and intense price competition. Mobile internet revenue remained high at 56.2% of prepaid revenue which contributed to the stable and high ARPU of RM42.
Maxis invested RM212 million capital expenditure (capex) in Q2 2018. Free cash flow was at RM541 million againts RM290 million in Q2 2017 mainly due to working capital changes.
While the market is expected to remain competitive, Maxis said it continues to focus on maintaining its leadership position by leveraging on its strong 4G LTE network with its leading coverage and speed.
The group is maintaining its guidance for the financial year ending December 31, 2018 with service revenue and earnings before interest, taxes, depreciation and amortisation (ebitda) to decline by mid-single digit and high-single digit respectively.
Its base capital expenditure is projected to be around RM1 billion and free cash flow (excluding upfront spectrum assignment fees) to be at a similar level to financial year 2017.
At 2.38pm, Maxis shares were trading at RM5.52, down 2 sen or 0.4%.