KUALA LUMPUR (Aug 9): Maxis Bhd's net profit climbed 2.48% to RM330 million for the second quarter ended June 30, 2023 (2QFY2023) from RM322 million a year ago, on higher service revenue, discontinued prosperity tax and prudent capital expenditure (capex) investments.
Earnings per share came in at 4.2 sen from 4.1 sen in 2QFY2022. The group also declared a second interim dividend of four sen per share, payable on Sept 29.
In a bourse filing on Wednesday (Aug 9), the communications service provider said its revenue rose 1.98% to RM2.47 billion in 2QFY2023 from RM2.42 billion in 2QFY2022.
Year-on-year, service revenue (revenue excluding the sale of devices), excluding wholesale voice, improved by RM65 million, or 3.2%, driven by a growth in consumer and enterprise businesses, particularly in core mobile connectivity.
Its postpaid unit delivered a revenue growth of 7.5% to RM871 million, driven by higher subscriptions of Maxis Postpaid and Hotlink Postpaid with postpaid subscriptions hitting 3.4 million, a 6.3% increase compared to 2QFY2022. Meanwhile, prepaid revenue contracted 4.1%, though continued adoption of Hotlink Prepaid plans helped sustained a healthy subscriber base of 5.7 million amid the competitive prepaid market.
Meanwhile, capex investment amounted to RM166 million this quarter, RM75 million less than what was spent in the corresponding quarter last year — RM241 million, “as the group is prudent in network capex investments following the maturity of its 4G network”, said the group.
Earnings before interest, taxes, depreciation and amortisation (Ebitda) decreased by RM10 million due to lower universal services provision income following project fulfilments this year.
Earnings before interest and taxes (Ebit) also fell by RM29 million, further impacted by amortisation costs from spectrum and software.
However, profit after tax rose to RM329 million, from RM322 million the year before, as the drop in Ebit was cushioned by the discontinuation of the prosperity tax in 2023.
Maxis saw its home connectivity business registering double-digit customer growth — 10.7% — bringing total home connections to 706,000, fuelling a 9.6% revenue increase to RM229 million.
On a year-to-date (YTD) basis, Maxis’ cumulative net profit rose to RM650 million from RM611 million a year ago, while cumulative revenue increased to RM5 billion compared to RM4.83 billion posted in 1HFY2022.
The group attributed its cumulative growth to the performance of its service revenue, excluding its wholesale voice, booking RM189 million contributed by a RM158 million (4.7%) increase in its consumer business segment, as well as a RM31 million (4.1%) gain in the enterprise business segment.
YTD, “operating free cash flow (OFCF) was healthy at RM1.13 billion, supporting the four sen dividend per share declared in the current quarter, and cumulative eight sen dividend per share declared for the YTD June 2023”, said Maxis.
In comparison to the preceding quarter, Maxis’ net profit increased from RM320 million in 1QFY2023, whereas revenue slipped slightly from RM2.53 billion.
In the consumer business segment, the increase in both postpaid revenue and home connectivity revenue was slightly offset by the decrease in prepaid revenue, as the group observes the trend of prepaid customers migrating to postpaid services.
Looking forward, Maxis said it continues to deliver outstanding results in its convergence strategy space and will strive to deliver a good track record in its mobile and fibre-converged services.
Earlier this July, the group announced that it intends to execute the access agreement with Digital Nasional Bhd (DNB), subject to shareholders’ approval at its extraordinary general meeting on Aug 14, 2023, to gain access to 5G products and services on a wholesale basis.
“Maxis welcomes the government’s decision on May 3, 2023 to transition towards a two 5G network model, and will provide our support for DNB to achieve its target of 80% coverage of populated areas by end-2023,” said the group.
"We are on the right track for stable growth in a competitive telco landscape. Our focus will always be on customer experience in terms of products, services, network and digitalisation. Very soon, we will offer 5G plans with attractive value for all segments," said Maxis chief executive officer Goh Seow Eng.
Key initiatives moving forward include having deployed the Software-Defined Wide Area Network (SD-WAN) for Johor Plantations Bhd to enhance its entire network of operations, alongside partnering with Boustead Petroleum to be part of its digitalisation exercise through deploying its SD-WAN system to power its payment terminals across Peninsular Malaysia.
Maxis added that it aims to hit a single-digit increase in service revenue, as well as for FY2023's Ebitda and capex to book similar levels to FY2022, though before any potential financial impact for 5G.
At 3.29pm on Wednesday, Maxis shares were traded up 2 sen or 0.51% at RM3.96, giving the group a market capitalisation of RM31.02 billion.