Financials

Financial Report For The Quarter Ended 31 March 2017

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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 (1st Quarter 2017 versus 4th Quarter 2017)

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 also lower overall operational costs and simplify the network architecture.

For the quarter ended 31 March 2017, the Group recorded service revenue of RM2,129 million against RM2,165 million in the previous quarter which was mainly impacted by seasonality including lower roaming revenue.

Quarter-on-quarter, Postpaid service revenue declined 2.1% to RM989 million mainly driven by lower seasonal roaming revenue highlighted earlier. The Group continued to grow its revenue generating subscription("RGS") base and added 32k new subscriptions in the quarter. This growth was primarily driven by the enhanced value proposition of our flagship MaxisONE plan. The Group now has a significant MaxisONE base of close to 1.8 million subscriptions with monthly ARPU of RM121, significantly higher than the blended ARPU of RM102.

Prepaid service revenue was relatively stable at RM1,005 million against RM1,018 million in the previous quarter. Prepaid ARPU stood at RM42 per month supported by continued mobile Internet traction. The Hotlink FAST pack launched in Q216 to spearhead the Group's 4G Prepaid market leadership continued to attract high mobile Internet ARPU users and has surpassed 1.7 million subscriptions with monthly ARPU of RM44.

The demand for mobile data continued to grow rapidly across all customer segments and the Group ended the quarter with 5.1 million 4G LTE users (Q416: 4.6 million) who consumed on average 6.5GB (Q416: 5.9GB) per month. The Group continued to lead the market in terms of coverage, quality and best digital experience. This was validated in a recent survey that named Maxis as having the best video quality experience in Malaysia.

Normalised EBITDA in the current quarter stood at RM1,118 million with normalised margin of 52.5%, against RM1,183 million and 54.6% respectively in the previous quarter. The EBITDA reflects investments to enhance the Group's efficiencies for long term structural cost benefits. In addition, the Group incurred one time resource cost on performance incentive. These were partially offset by lower realised foreign exchange losses.

Consequently, the Group recorded lower normalised profit of RM510 million compared to RM544 million in the preceding quarter.

Performance of the current year against the preceding year (YTD March 2017 versus YTD March 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.

Year-on-year, service revenue was stable at RM2,129 million (YTD 2016: RM2,122 million) in spite of intense price competition.

Postpaid service revenue stood at RM989 million (YTD 2016: RM997 million), supported by a solid base of almost 1.8 million MaxisONE subscriptions with high monthly ARPU of RM121. The Group added 826k new MaxisONE subscriptions driven by the enhanced value proposition of our flagship MaxisONE plan. As a result, blended Postpaid ARPU sustained at RM102 per month despite intense competition driving down industry price points.

Prepaid revenue was stable at RM1,005 million (YTD 2016: RM1,008 million). Higher mobile Internet revenue negated the impact of lower RGS base caused by churn, mainly in low value customers. Mobile Internet revenue now accounts for 44% of Prepaid revenue against 33% a year ago. This corresponds with an increase in Prepaid 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 77% from 67% a year ago.

On a 12 month basis, blended data usage had more than doubled to 4.3GB per month against 1.6GB in the same period last year. The Group's extensive 4G LTE network at 88% nationwide population coverage continued to be an important enabler of worry-free digital experience.

Normalised EBITDA and EBITDA margin stood at RM1,118 million and 52.5% (YTD 2016: RM1,156 million and 54.5%) respectively, mainly a result of investment for future efficiencies and one time resource cost. The Group, however, recorded higher normalised profit of RM510 million compared to RM484 million a year ago mainly due to lower property, plant and equipment related charges and tax expense.

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 further enhance its core customer propositions and maintain a high quality network to enable worry-free digital experience.