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Tuesday March 1, 2011

Maxis Q4 profit up and CEO sees good growth in data and broadband

KUALA LUMPUR: Maxis Bhd's net profit rose 21.3% to RM610mil for the fourth quarter ended Dec 31, 2010 from RM503mil previously due to increased contribution from the non-voice segment and a bigger subscriber base.

Its revenue rose to RM2.31bil versus RM2.21bil previously.

“The group recorded a quarter-on-quarter revenue growth of 4% or RM94mil primarily driven by an increase in non-voice revenue by RM84mil or 10% to RM893mil. This was contributed by advanced data services, short message service and wireless broadband businesses, partially offset by reduction in interconnect revenue,” Maxis said in the notes accompanying its financial results.

The telco's profit from operations stood at RM887mil while earnings per share was 8.10 sen against 6.70 sen posted a year ago.

However, Maxis said the comparative figures did not represent a like-for-like comparison of the operational performance of the group because of the accounting treatment adopted for the business combination by Maxis, which was completed on Oct 1, 2009.

Maxis' EBITDA (earnings before interest, taxation, depreciation and amortisation) margin for the fourth quarter was lower at 50.6% against 51.4% in the preceeding quarter.

During the quarter, Maxis also declared an interim dividend of 8 sen per share and also proposed a final dividend of 8 sen per share totalling up to a RM1.2bil payout.

For the full financial year ended Dec 31 (FY10), Maxis' net profit stood at RM2.3bil on revenue of RM8.87bil. Its EBITDA margin for the year stood at 49.8%.

As at Dec 31, the company had a cash and cash equivalent of RM898mil.

Chief executive officer Sandip Das said Maxis had managed to maintain its EBITDA margin close to 50% level despite margin contraction pressure in its voice segment last year.

“The sluggishness or maturity of the voice market came much faster than we thought,” he said at a briefing yesterday.

Going forward, Das expects growth to come from data and broadband. He said the company had spent the past two years since its re-listing in late 2009 building a strong network.

“We need to build (the network) for the tsunami that's to come ... the tsunami for data and broadband,” he said, adding that Maxis managed to secure 330,000 net adds in the broadband segment in FY10 to a total of 594,000 subscribers.

As at Dec 31, Maxis' had a total of 13.95 million subscribers while its prepaid subscribers crossed the 10 million mark.

To a question, Das said expected Maxis to achieve a mid-single-digit growth revenue for FY11 to be driven by non-voice services, including data and broadband.

He said non-voice revenue was among the global best in the FY10, accounting for 41.5% of mobile revenue contribution.

“We aim to increase the contribution to 50% by mid-2012. The company will continue to maximise its mobile revenue and continue to be the leader in the market,” he said.

On capital expenditure for FY11, Das said the company planned to spend RM1.4bil, of which 40% to 50% would be used to upgrade its 3G network including fibre optic build-up, and about RM300mil for the infrastructure of its fixed line.

One focus this year would be the commercialisation of home services which would take effect next month, he said.

Among the services to be offered include IP-based services (to be delivered over high-speed broadband access), interactive television, telepresence and eHealth hosting services.

Maxis' blended average revenue per user (ARPU) stood at RM51 against RM56 a year ago.

Its prepaid ARPU fell 12% to RM36 in FY10 from RM41 previously while wireless broadband ARPU fell 30% to RM68 from RM97 in 2009.

Chief financial officer Rossana Rashidi said the prepaid ARPU was partly cannibalised due to lifetime schemes and youth plans, which were now being phased out, and revenue-enhancing plans were being introduced.

She said the lower broadband ARPU was due to promotion packages used to encourage take-up from fresh segments.


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