Financials

Financial Report For The Quarter Ended 31 December 2016

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Condensed Consolidated Statements Of Profit Or Loss

Maxis Income Statement 3Q

Condensed Consolidated Statements Of Financial Position

Maxis Balance Sheet 3Q

Analysis Of Performance

Performance of the current quarter against the preceding quarter (4th Quarter 2016 versus 3rd Quarter 2016)

Notes

  1. Service revenue is defined as Group revenue excluding device, hubbing revenues and network income.
  2. Defined as profit before finance income, finance costs, tax, depreciation, amortisation and allowance for write down of identified network costs.
  3. The IT and network modernisation programmes enable the Group to strengthen its access network to enhance the customer experience and usage to drive revenue growth. The modernisation programmes will also lower overall operational costs and simplify the network architecture.

The Group's service revenue for Q4 2016 grew 2.5% to RM2,165 million against RM2,113 million in the previous quarter. This positive momentum was primarily driven by the Pospaid segment.

Quarter-on-quarter, Postpaid service revenue grew 4.6% to RM1,004 million on account of a higher revenue generating subscription ("RGS") base an ARPU. The Group added 34k new subscriptions in the quarter marking the second consecutive quarter of net additions. Postpaid RGS growth was primarily driven by the data enriched MaxisONE Plan ("MOP"). In the quarter under review, close to 1.5 million MOP customers were automatically upgraded with a minimum of two-times more data quota at no extra charge. This included a weekend data allocation as more customers are using their smart devices on weekends, especially for entertainment and video. As a result, the Group now has a solid MOP base approaching 1.7 million subscriptions with ARPU of RM127 per month.

Prepaid service revenue stood at RM1,024 million against RM1,022 million in the previous quarter. The Group was able to sustain the revenue momentum against a seasonally high festive-driven revenue in the third quarter and this was mainly supported by significant Mobile Internet ("MI") growth. The Hotlink FAST pack launched in Q216 has surpassed 1.5 million users and continued to attract high MI ARPU users. As a result, MI penetration grew to 59% (Q316: 55%) and Prepaid ARPU was higher at RM42 (Q316: RM41) per month. Whilst the Group ended the quarter with a lower RGS base of 7,946k, the net loss in subscriptions recorded in Q416 has reduced significantly against earlier quarters.

The Group continued to register solid 4G LTE adoption momentum ending the quarter with 4.6 million users (Q316: 4.1 million) who consumed on average 5.9GB per month (Q316: 4.4GB). These represent increases of 2.0 million new users and more than 3GB per month respectively from a year ago. 4G LTE population coverage has reached 88% on comparable peer basis and the Group continued to lead the market in terms of coverage, quality and best digital experience.

Normalised EBITDA in the current quarter grew 3.9% to RM1,183 million with normalised margin of 53.4%, against RM1,139 million and 52.8% respectively in the previous quarter. EBITDA grew mainly as a result of higher revenue and less marketing activities offset by higher realised foreign exchange losses.

The Group recorded normalised profit of RM544 million compared to RM514 million in the preceding quarter, on the back of higher EBITDA.

Performance of the current year against the preceding year (Year 2016 versus Year 2015)

Notes

  1. The comparative results were restated to provide more comparable information with the current year.
  2. Service revenue is defined as Group revenue excluding device, hubbing revenues and network income.
  3. Defined as profit before finance income, finance costs, tax, depreciation, amortisation and allowance for write down of identified network costs.
  4. The IT and network modernisation programmes enable the Group to strengthen its access network to enhance the customer experience and usage to drive revenue growth. The modernisation programmes will also lower overall operational costs and simplify the network architecture.

Year-to-date, the Group's service revenue stood at RM8,455 million (Year 2015: RM8,520 million).

Postpaid service revenue was relatively stable at RM3,931 million (Year 2015: RM3,923 million) as a result of higher ARPU offset by lower RGS base. In the last 12 months, the Group doubled its MOP subscription base to almost 1.7 million with an average monthly ARPU of RM138, much higher than the average Postpaid ARPU of RM102 per month. MaxisONE Share continued to be a strong catalyst driving incremental port-ins with more than one-third of MOP customers having a share line.

Prepaid service revenue declined 3.7% to RM4,018 million (Year 2015: RM4,173 million) mainly attributed to a lower subscription base as a result of intense price competition, particularly in the first half of the financial year under review. The increase in Prepaid ARPU to RM40 (Year 2015: RM38) per month was driven by continued traction on MI usage which more than compensated for the decline in voice and SMS. The increase in MI usage was further supported by Prepaid smart-phone penetration which has risen to 74% against 67% a year ago.

Data comsumption continued to increase across the Group's customer base. On a 12-month basis, blended data usage had more than doubled and is now at 3.7GB per month against 1.5GB. The Group's extensive 4G LTE network at 88% nationwide population coverage continued to be an important driver for unmatched digital experience.

Normalised EBITDA and EBITDA margin stood at RM4,484 million and 52.1% against RM4,425 million and 51.4% respectively in the preceding year as a result of efficient marketing spend and cost optimisation programme.

The Group recorded normalised profit of RM1,963 million, relatively unchanged compared to RM1,960 million a year ago.

Prospects For The Financial Year Ending 31 December 2017

For the financial year ending 31 December 2017, the Group expects service revenue, absolute EBITDA and base capital expenditure to remain at similar levels to financial year 2016. To stay competitive, the Group will continue to enhance and strengthen its customers' propositions whilst focusing on providing the best connectivity.