PETALING JAYA: Maxis Bhd’s net profit for the first quarter ended March 31 fell 22% to RM409 million from RM523 million a year ago attributable to the decline in wholesale revenue.
The group said in a statement that its wholesale revenue was affected by the termination of the network sharing agreement, continued investment in FibreNation and mobilisation of the enterprise business growth opportunities.
Revenue for the quarter was flat at RM2.23 billion compared with RM2.24 billion in the previous year’s corresponding quarter.
The group has declared a first interim single-tier tax-exempt dividend of 5 sen per share, to be paid on June 27.
Maxis said there are a few key items impacting the group in 2019, including the impact of changes to a major wholesale network sharing agreement in the first and second quarters, dilution in fibre average revenue per user from the new competitive priced plans and the cost of customer migration initiative coupled with the increase in cost to serve.
It also foresees higher cost of business due to the sales and service tax. Maxis maintained its guidance for the financial year ending Dec 31.
Service revenue and earnings before interest, tax, depreciation and amortisation are expected to decline by low single-digit and mid single-digit respectively.
Core network capital expenditure is expected to be around RM1 billion plus capex supporting new growth opportunities in broadband and enterprise business (around RM1 billion over three years) while operating free cash flow (excluding upfront spectrum fee assignment) should remain at a similar level as year 2018.
The group is implementing a change in strategic direction, building on its strong mobile base to deliver its internal annual service revenue target in excess of RM10 billion by 2023.
