Maxis Q2 profits up 11.3%, revenue dips

By Digital News Asia August 6, 2013

Strong growth in data helps mitigate declining voice and SMS revenue
6.5 million of its 12.4-million subscription base use smartphones, a 52% penetration rate

MAXIS Berhad reported net profit was up 11.3% to RM530 million for the second quarter which ended June 30, compared with RM476 million in the first quarter.

It attributed this boost to the strength of its non-voice business, particularly mobile Internet, and cost management.

Maxis recorded service revenue – which it defines as total revenue less device revenue – of RM2.206 billion, up 0.1% from RM2.205 billion in Q1 2013. This was driven by strong growth in data which helped to mitigate, to an extent, the declining voice and SMS revenue.

Non-voice revenue for the quarter was at RM1.023 billion and accounted for 47.6% of mobile revenue.

Total revenue however, took a marginal dip to RM2.294 billion from the RM2.327 billion in Q1 2013 mainly due to lower outright sales of terminal devices that have low margins, the company said in a statement.

Maxis recorded an Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) of RM1.165 billion, 3.8% higher than that of the preceding quarter. EBITDA margin improved to 50.8% in the same period.

[RM1 = US$0.31]
Maxis Q2 profits up 11.3%, revenue dips
“We are pleased to note that our market initiatives are making steady progress and continuing to gain momentum,” Maxis chairman Arshad Uda (pic) said.

“Our performance this quarter was fuelled by higher mobile internet usage from the launch of innovative data products,” he said, adding that smartphone use continued to increase among its customers.

Arshad said that 6.5 million of Maxis’ 12.4-million subscription base (excluding broadband dongle subscribers) are using smartphones, representing a penetration rate of 52%.

“I am also pleased to announce that Maxis has declared a second interim dividend of eight sen per share amounting to RM600 million to our shareholders,” he added.

During the quarter, Maxis introduced a location-based advertising service and an Opera Mini data plan for customers to enjoy unlimited Internet browsing.

Maxis said it also continued to lead the market with 13.9 million total subscriptions.

For the first half of 2013, Maxis registered a PAT (profit after tax) of RM1.006 billion, on the back of a 4% growth in revenue to RM4.621 billion. PAT was impacted by the acceleration of depreciation of network equipment as the company continued to modernise its network to be 4G LTE-ready, resulting in a slight reduction from the RM1.039 billion recorded last year.

Maxis also recorded an EBITDA of RM2.287 billion, up 2.1% from the RM2.239 billion in the first half of 2012. EBITDA Margin was at 49.5%, remaining the highest in the industry, it claimed.

The company said it spent RM407 million in capital expenditure in the first half of 2013. Since the launch of its high-speed 4G LTE (Fourth Generation Long-Term Evolution) network on Jan 1, Maxis has expanded 4G LTE coverage beyond the Klang Valley to Penang and Johor Bahru, and was the first to provide 4G LTE in East Malaysia, starting with Kuching and Kota Kinabalu.

“As at end of June 2013, we had close to 250,000 subscribers with 4G LTE devices, and we are on track to expand 4G coverage to reach 18% of the population by the end of the year,” said Arshad.

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