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Digi 3Q earnings fall 9.9%

16 Oct 2020 / 14:14 H.

PETALING JAYA: Digi.Com Bhd’s net profit for the third quarter ended Sept 30 dropped 9.9% to RM320.76 million, from RM356.05million in the previous corresponding quarter due to the slowdown compounded by Covid-19.

The group’s revenue however, was slightly higher at RM1.6 billion, from RM1.56 billion a year before, driven by commercial momentum recovering to pre-movement control order (MCO) levels, that increased its earnings before interest, tax, depreciation and amortisation (Ebitda) to RM786 million, with an Ebitda margin of 50%.

The group announced a third interim dividend of 4.1 sen per share equivalent to RM319 million, payable to shareholders on Dec 17, 2020.

Digi’s CEO Albern Murty said: “Digi navigated well through a difficult time to deliver a better quarter, driven by our

resilience to improve business opportunities as we supported our customers. to emerge stronger from the crisis. In

the quarter, we expanded our range of innovative and value-driven offering across our core product portfolios,

launched fibre broadband nationwide to serve more households with total connectivity, and modernised our

distribution and network capabilities.

‘Going forward, we remain focused on financial resilience by prioritising investments in strategic areas to enable greater affordability for customers, and drive growth for the business.”

In Q3’20, the company invested RM134 million in capital expenditure for network enhancements to maintain service quality and availability nationwide. An additional 44% new and upgraded sites were deployed in 9M’20 versus a year ago.

Digi’s 4G LTE and LTE-A network now covers 91% and 74% of the population respectively, together with a fibre network that stretches 9,850km.

For the cumulative period, Digi saw a 13.7% decline in net profit to RM940.8 milion, from RM1.09 billion previously. Revenue also came in slight lower at RM4.6 billion for the first nine months, from RM4.62 billion a year ago.

Looking ahead, the group said it takes into consideration the uncertain market conditions related to the rising severity of the Covid-19 pandemic in the country, and consequently is fully committed to delivering on the recently announced Pelan Jalinan Digital Negara (Jendela), that aims to deliver seamless and quality connectivity to all Malaysians.

“The company is keeping a sharp focus on key priorities anchored on its resilient fundamentals: solid financial strength, efficient operations, and cost optimisation, organisational agility in digitalisation, operating model innovation, and future-ready network, strong value proposition, prioritising customer experiences with greater affordability and flexibility, and prioritising customer and employee safety while carrying out operations,” it said.

To reflect the uncertain period considering the ongoing enhanced or conditional MCO in certain states and districts, and its impact to its physical stores and channels, Digi has revised its 2020 guidance.

It now expects a low to medium single digit percentage decline in service revenue, a medium to high single digit percentage decline in Ebitda, and a similar level of capex seen in 2019.

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