DiGi Q4 profit up on increased subscriber usage

Saturday January 29, 2011
By LEONG HUNG YEE
hungyee@thestar.com.my


KUALA LUMPUR: DiGi.Com Bhd net profit for the fourth quarter ended Dec 31, 2010 jumped 34.7% to RM332mil mainly due to increased usage from a bigger subscriber base.

“Higher usage from an enlarged subscription base of 8.8 million (2009: 7.7 million), the inclusion of handset bundles plus rising revenue contributions from data services were the key revenue drivers for the year,” DiGi said in a note accompanying its results.

In a filing with Bursa Malaysia yesterday, the company said its revenue for the fourth quarter rose 14.5% to RM1.43bil from RM1.24bil previously. Its earnings per share rose to 42.7 sen from 31.7 sen.

For the full year ended Dec 31, 2010 (FY10), DiGi net profit improved 17.7% to RM1.17bil versus RM1bil in the previous corresponding period. Revenue for the full year was up 10% to RM5.4bil while pre-tax profit increased to RM1.59bil.

DiGi has declared a fourth interim dividend of 43 sen single-tier exempt dividend per ordinary share of 10 sen each for FY10.

“We have tapped on the rapid increase in demand for quality Internet access that we saw in Malaysia during the year while at the same time, we continued to make inroads into previously underserved markets,” chief executive officer Henrik Clausen said in a separate statement.

“We have anticipated the needs of our customers well by making access to smart phones easier and affordable, with applications that are relevant to our customer base. This has stimulated increased usage from the larger subscriber base of 8.8 million, which in turn, improved the overall revenue contributions of data services,” he said.

DiGi has 4.2 million Internet users and expects demand to trend up from both existing and new customers. Its data services registered a growth of about 20% year-on-year to RM1.2bil against RM1bil in FY09.

“It was mainly precipitated by high take-up of smart-phone bundles and attractive mobile broadband offerings launched in the year. However, average revenue per user (Arpu) dipped to RM52 (2009: RM55). This was the cumulative result of increased competition on international traffic, a higher proportion of on-net traffic and reduced domestic interconnect revenue following the reduction in mobile termination rate that came into effect in early July 2010,” DiGi said.

Group earnings before interest, tax, depreciation and amortisation (Ebitda) grew 13% to RM2.4bil from RM2.1bil in the previous year.

DiGi attributed the improved Ebitda to the group’s efforts in executing its planned operational efficiency initiatives, coupled with strong revenue momentum. “Correspondingly, Ebitda margin improved to 44.4% in FY10 from 43.3% a year ago,” it added.

On its outlook for 2011, DiGi said it would continue to actively address the rising demand for quality data services in Malaysia.

“We will prioritise network investments, which include growing our 3G/HSPA coverage from the current 50% to accelerate our reach, and cater for higher speed capacity, reliability and quality of service. Capital expenditure will be in line with 2010 to support this,” Clausen said.

DiGi expects to “achieve high single-digit revenue growth” for FY11.

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