KUALA LUMPUR: CelcomDigi Bhd cut its service revenue and earnings before interest, tax and taxation (ebit) targets for the year to reflect effects of a decline in its prepaid business which was seen in the third quarter ended Sep 30, 2024 results.
Revenue for the prepaid segment was down 4.4 per cent to almost RM1.1 bilion for the quarter, from dual-SIM consolidation and a strategic decision to reduce reliance on one-time rotational SIM segment.
Service revenue fell 0.9 per cent to RM2.7 billion in the third quarter ended Sep 20, 2024 and ebit jumped almost 11 per cent to RM771 million.
The increase in ebit was mainly driven by lower depreciation charges as most assets affected by the change in useful life were fully depreciated earlier in the year.
For the nine-month period ended Sep 30, 2024, service revenue was down 0.6 per cent to RM8 billion, while ebit was up 5.8 per cent to RM2 billion.
In its filing with Bursa Malaysia Securities, the company said service revenue will likely be flat or down for the year, while ebit will be down by low digit single digits.
The telecommunication company was more optimistic in its second quarter ended June 30, 2024 results when it projected service revenue and ebit growth .
Capital expenditure to total revenue ratio was maintained between 15 per cent and 18 per cent.
"We anticipate results to be relatively stable, with revenue performance expected to remain flat or experience a slight decrease compared to FY 2023." "This reflects the effects of SIM consolidation and lesser focus on the one-time SIM segment. Despite this, we remain focused on revenue initiatives to drive growth and maintain strict cost management to strengthen our position in the long term," it said in its filing with Bursa Malaysia Securities.
CelcomDigi posted a 4.1 per cent drop in net profit to RM436.9 million, in the absence of writeback from deferred tax liabilities reported in a year ago.
This was on 0.7 per cent revenue of RM3.12 billion from RM3.10 billion, driven by robust growth in the home & fibre segment, which recorded a subscriber base increase of over 50 per cent. This growth however was moderated by a shift away from one-time prepaid SIM acquisitions and SIM consolidation, along with lower interconnect revenue due to regulated rate reductions.
Net profit for the nine-month period ended Sep 30, 2024 jumped 8.9 per cent jump to RM1.2 billion, against almost flat revenue of RM9.4 billion.
CelcomDigi said with the government's announcement of the selection of the mobile network that will implement Malaysia's second 5G network, its priority remains to ensure that its customers have affordable access to competitive, robust, and efficient 5G services.
"We are considering multiple viable options ahead of us, taking into account their impact on our customers and shareholders," the telecommunications company said.