Financials

Financial Report For The Quarter Ended 30 June 2017

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Condensed Consolidated Statements Of Profit Or Loss

Condensed Consolidated Statements Of Profit Or Loss

Condensed Consolidated Statements Of Financial Position

Condensed Consolidated Statements Of Financial Position

Analysis Of Performance

Performance of the current quarter against the preceding quarter (2nd Quarter 2017 versus 1st Quarter 2017)

Notes

  1. The comparative results were restated to provide more comparable information with the current period.
  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. Write back of service fees accrued for prior years which are no longer required.

For the quarter ended 30 June 2017, the Group recorded stable service revenue of RM2,122 million amidst continued intense market competition.

Postpaid service revenue grew 0.9% to RM998 million supported by a higher RGS base. The Group added 41k new subscriptions, achieving the highest new additions following the revamp of the Group's flagship MaxisONE plan ("MOP"). The Power of ONE compaign which enabled subscribers to own a wide range of devices for RM1 continued to attract high ARPU customers. As a result, the Group has grown its MOP subscription base to 1.9 million with monthly ARPU of RM120, which is higher than the blended ARPU of RM102.

Prepaid service revenue declined 2.1% to RM984 million on the back of a lower subscription base in a market that is undergoing SIM consolidation. Prepaid ARPU was stable at RM42 per month supported by continuous growth in mobile Internet revenue. The Group's Hotlink FAST pack continued to maintain a strong market leadership position in the 4G segment, attracting high mobile Internet ARPU users. The Group is also seeing encouraging traction from the "Happy Hour" mobile Internet passes launched early April this year. The Group's Hotlink FAST base has now surpassed 1.8 million subscriptions with monthly ARPU of RM44.

Customer demand for data continues to grow strongly, supported by the rising consumption of social media, increasing availability of TV and video on mobile devices and better user experience on mobile network. The Group ended the quarter with 5.6 million 4G LTE users (1Q17: 5.1 million) with average usage of 7.0GB per month (1Q17: 6.5GB). 4G LTE population coverage has reached 89% on a comparable peer basis and the Group continued to lead the market in terms of coverage, quality and best digital experience. This has translated to an all-time high touch point net promoter score of +49.

Quarter-on-quarter, normalised EBITDA stood at RM1,104 million with a margin on service revenue of 52.0%, against RM1,123 million and 52.7% respectively in the previous quarter. The decline in EBITDA was mainly driven by higher realised foreign exchange losses coupled with continuous investment for future efficiencies.

The Group reported lower normalised profit of RM484 million compared to RM514 million in the preceding quarter on the back of lower EBITDA.

Performance of the current year against the preceding year (YTD June 2017 versus YTD June 2016)

Notes

  1. The comparative results were restated to provide more comparable information with the current period.
  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 also lower overall operational costs and simplify the network architecture.
  5. Write back of service fees accrued for prior years which are no longer required.

The Group recorded positive service revenue growth of 1.8% to RM4,251 million (YTD 2016: RM4,177 million) on the back of steady Prepaid and Postpaid performance amidst continuous price competition.

Prepaid service revenue grew 1.3% to RM1,989 million (YTD 2016: RM1,964 million) supported by higher mobile Internet revenue which negated the impact of lower RGS base caused mainly by SIM consolidation. On the back of a higher Hotlink FAST subscription base which has surpassed 1.8 million, mobile Internet revenue now accounts for close to 50% of Prepaid revenue against 39% a year ago. This corresponds with an increase in ARPU to RM42 per month from RM39 in the same period last year. The increase in mobile Internet usage was further supported by Prepaid smart-phone penetration which has risen to 78% from 68% a year ago.

Postpaid service revenue grew 0.6% to RM1,987 million (YTD 2016: RM1,975 million) supported by a solid MOP subscription base of 1.9 million. The Group added 597k new MOP subscriptions with ARPU of RM120 per month in the period under review.

Blended smart-phone penetration stood at 79% against 70% in the same period last year. Blended data usage grew more than double in the last 12 months and is now at 5.0GB/month. The Group's expanded 4G LTE network, with a nationwide population coverage of 89% on a comparable peer basis, continued to be an important differentiator for customers to enjoy high speed unmatched digital experience.

Normalised EBITDA and EBITDA margin on service revenue stood at RM2,227 million and 52.4% (YTD 2016: RM2,171 million and 52.0%) respectively, mainly a result of higher revenue base and efficient marketing spend which were partially offset by higher one-time resource costs and investment to enhance the Group's efficiencies for long term structural cost benefits.

Normalised profit for the period under review was higher at RM998 million (YTD 2016: RM911 million) driven by higher EBITDA coupled with lower property, plant and equipment related charges.

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. The Group will continue to focus on strengthening its network leadership and deliver differentiated digital experience for its customers.