KUALA LUMPUR (Nov 18): CelcomDigi Bhd (KL:CDB) on Monday cut one of its key financial targets, after its net profit slipped in the third quarter as costs rose faster than revenue growth.

Net profit for the three months ended Sept 30, 2024 (3QFY2024) was RM437 million, down 4.04% from the same period in 2023. Year-on-year (y-o-y), total costs climbed 5.2% amid rising roaming cost, device subsidies, as well as 5G access and fibre expenses. Revenue, meanwhile, grew 0.7% to RM3.13 billion.

“We anticipate results to be relatively stable, with revenue performance expected to remain flat, or experience a slight decrease compared to 2023,” CelcomDigi said. “This reflects the effects of SIM consolidation and lesser focus on the one-time SIM segment.” 

The company revised its full-year guidance, expecting service revenue to be “flat- to slightly decreased,” compared to its previous projection of a “low single-digit increase”. It also adjusted its earnings before interest and tax (Ebit) growth outlook to a “low single-digit decrease”, from an earlier forecast of a “single-digit decrease”.

CelcomDigi declared a third interim dividend of 3.6 sen per share, the highest in the past four quarters, payable on Dec 23. This brings the year-to-date dividend payout to 10.6 sen per share, up from 9.7 sen in the same period last year.

For the nine months ended Sept 30, 2024 (9MFY2024), cumulative net profit increased 9.2% to RM1.22 billion, compared to RM1.12 billion in the previous corresponding period. Revenue for the nine-month period slipped marginally by 0.04% to RM9.40 billion, from RM9.41 billion.

Postpaid subscribers grew 92,000 quarter-on-quarter (q-o-q)and 377,000 on year in 3QFY2024, reaching 5.71 million subscribers, with postpaid revenue at RM1.046 billion.

Prepaid subscribers were lower by 105,000 q-o-q, and 775,000 y-o-y in 3QFY2024, amounting to 12.84 million subscribers. Revenue was RM1.1 billion, translating into average revenue per user (Arpu) of RM28.

Home fibre saw subscriber growth at 19000 q-o-q, and 58,000 y-o-y, totalling 159,000 subscribers. Revenue was RM49 million, transalting into a higher Arpu of RM109.

CelcomDigi’s chief executive officer Datuk Idham Nawawi attributed the results to the group’s focus on sustainable growth, disciplined cost management, and ongoing synergy realisation from the merger.

“We continue to step up customer excellence by consistently offering best-value products to our customers, as well as enriching customer experience through our enhanced network, and a fresh, ‘digital-everything’ retail model at our modernised retail stores,” Idham said in a statement accompanying the company result.  

Commenting on the recent selection of the mobile network operator for Malaysia’s second 5G rollout, CelcomDigi said it is “considering multiple viable options ahead of us, taking into account their impact on our customers and shareholders”.  

“Our priority remains to ensure that our customers have affordable access to competitive, robust, and efficient 5G services,” it added.

CelcomDigi’s integration and modernisation efforts are now close to 70% complete, it added.

The company aims to complete 75% of network upgrades by the end of 2024, ahead of its target. 

The company recorded another major milestone, as it completed the first phase of harmonising Celcom’s and Digi’s core billing and customer relationship management (CRM) system into a single, enhanced platform. 

The company invested RM384 million in capital expenditure (capex) in the quarter, to deliver on its network and IT-integration initiatives. 

As a flow-through of cost savings from these integration initiatives, the company has generated gross synergy of approximately RM1.0 billion year-to-date, realising from cost savings, cost avoidance, and economies of scale, exceeding its RM700 million guidance for 2024. It is on track to deliver its RM8 billion net present value (NPV) target by 2027.   

Shares of CelcomDigi rose four sen or 1.2% as at midday market break on Monday, valuing the company at RM39.54 billion.