KUALA LUMPUR: Maxis Bhd, which posted a net profit of RM1.78bil in the financial year ended Dec 31, 2018 (FY18), has announced RM1bil over next three years for incremental capital expenditure (capex) to support its new strategy.
“Maxis made a significant change to its strategy, setting the foundation to be a strong converged player in Malaysia. The company has commenced scaling its business to address opportunities in Enterprise solutions and converged services across all segments, setting the development path over the next five years.
“Maxis announced an incremental capex of RM1bil over the next three years to support this new strategy and its 5-year internal service revenue target of more than RM10bil by year 2023,” Maxis said in a statement.
The telco group saw its revenue declined marginally to RM9.19bil in FY18 from RM9.41bil in the previous year. Its earnings per share (EPS) for the period stood at 22.80 sen against 28.50 sen previously.
In FY18, Maxis recorded a service revenue of RM8.06bil, representing a 2.5% decline compared to FY17 service revenue of RM8.27bil.
Maxis said the decline in prepaid service revenue was partially offset by the growth in postpaid and home fibre business service revenue.
Its postpaid service revenue grew 5.1% to RM4.07bil in FY18 supported by a solid subscription base that has over three million subscribers. The group added 282,000 new subscribers and high average revenue per user (ARPU) of RM93 per month.
Prepaid service revenue declined 11.4% to RM3.39bil mainly due to lower subscription base on continued SIM consolidation, migration to postpaid and price competition. ARPU remained stable at RM42 per month.
Its normalised Ebitda for FY18 declined to RM3.84bil and Ebitda margin on service revenue decreased to 47.6%.
For the full year its normalised profit was lower by 14.7% at RM1.76bil.
Maxis has a strong free cash flow in FY18 at RM1.52bil, an increase of 4% compared to RM1.46bil in the preceding year mainly due to a new productivity programme and enhanced working capital management, both delivering initial benefits.
Chief executive officer Robert Nason said Maxis closed 2018 by maintaining a strong core operating performance.
“We strengthened our competitive position in the market with some significant moves – we led the market with new affordable home and business fibre plans and grabbed first mover advantage through our fibrenation campaign.
“We are currently the only operator in Malaysia capable of offering a full combination of both fixed and mobile technologies for consumers and enterprises. Our one-off costs in Q4 were a necessary investment in the interest of our customers and for our long-term growth strategy.
“Overall, we are happy with our results and the substantial progress we have made during the year,” he said in the statement.
In the fourth quarter ended Dec 31 (4Q18), Maxis’ net profit halved to RM266mil in the fourth quarter ended Dec 31. The telco declared a fourth interim dividend of five sen net per share, bringing full-year dividends to 20 sen a share.
Its revenue, however, grew 3% to RM2.44bil against RM2.37bil in the same period a year earlier. Its earnings per share for the period stood at 3.40 sen from 6.90 sen previously.
Postpaid service revenue grew by 2.8% to RM1.05bil on account of higher revenue generating subscribers (RGS) base. Postpaid RGS grew by 80,000, contributed by the growth in the MaxisONE Plan subscriber base. Postpaid average revenue per user (ARPU) was stable at RM94 for the quarter.
The growth in postpaid was primarily driven by the strong demand for our innovative device and value-accretive propositions. Its Hotlink Postpaid Flex and MaxisONE Share offerings continued to attract entry level postpaid subscribers, as well as those migrating from prepaid to postpaid.
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