KUALA LUMPUR (May 28): CelcomDigi Bhd (KL:CDB), Malaysia’s largest mobile carrier by subscribers, said on Tuesday that its net profit rose 18% year-on-year (y-o-y) in the first quarter, thanks largely to a writeback on provisions.

Net profit for the three months ended March 31, 2024 (1QFY2024) was RM376.46 million compared to RM317.92 million over the same period last year, CelcomDigi said in an exchange filing. The company reversed an over-recognition of tax provision totalling RM51.43 million during the quarter.

The company declared a first interim dividend of 3.5 sen per share for FY2024, payable on June 28.

Revenue for the quarter slipped 0.8% y-o-y to RM3.15 billion from RM3.18 billion, as lower interconnect rate, reduced bulk messaging traffic and overall softer usages dragged on service revenue, despite an enlarged subscriber base.

The mobile carrier’s total subscribers rose 0.9% to 20.47 million from 20.29 million a year earlier, while average revenue per user (Arpu) dropped to RM40 from RM42 previously.

The company is taking “proactive measures” to stabilise Arpu amid the recent decline, with targeted initiatives such as “data-driven pricing strategies and value-added service bundling”, CelcomDigi said.

While CelcomDigi noted on the challenges regarding its declining Arpu, the company is broadly maintaining its guidance for the year, as it anticipates a low single-digit increase in service revenue growth, similar earnings before interest and tax level as FY2023, and a capital expenditure-to-total revenue ratio of between 15% to 18%.

The company also noted that it is ahead of schedule in its three-year post-merger transformation journey, with the completion of 44% of its nationwide network integration and modernisation programme.

“The successful execution of integration and synergy realisation initiatives positions us for sustained growth and market leadership, as we continue to capitalise on the synergies and opportunities unlocked by the merger,” it said.

Shares in CelcomDigi closed eight sen or 1.96% lower at RM4.00 on Tuesday, giving it a market capitalisation of RM46.93 billion.