CelcomDigi expects growth in FY24

Idham said CelcomDigi has successfully achieved all first-year integration milestones .

PETALING JAYA: Cementing market leadership, boosting operational excellence and brand building will be CelcomDigi Bhd’s three main focus areas for 2024.

CelcomDigi chief executive officer Datuk Idham Nawawi said while the group currently leads in terms of its core business areas of mobile, postpaid and prepaid, it is important to ensure that the group continues to maintain its position as a market leader by consistently providing the best network and experience to its customers.

“Secondly, we are focused on operational excellence. This entails relooking at our operating model and the way we do things within the company to set up a new way of work.

“This is referred to as institutionalising operational excellence to ensure that cost and efficiency are at the core of how we evaluate all the things that we plan to do,” he said during the group’s media briefing on its fourth quarter (4Q) and full-year results for the financial year 2023 (FY23) yesterday.

Idham said CelcomDigi has successfully achieved all first-year integration milestones enabling the company to realise gross synergy of over RM300mil in FY23.

“Brand building is not just about putting up logos everywhere but it is about building up what the brand stands for.

“We believe that with the network that we are building and upgrading, coupled with the way we manage and support our customers, we are poised to create a new brand which our customers can trust and rely on.

“This is not just Digi or Celcom; it is CelcomDigi. While it carries the same names, it is a very different company. The transformative journey we are undergoing is with regards to how we operate, manage our network and go to market,” he said.

The country’s biggest wireless carrier by subscribers has completed 35% of its network integration and modernisation target, which is ahead of its initial plan of 30% by the end of 2023.

CelcomDigi had modernised over 5,600 sites as of December 2023, enabling customers in post-consolidation areas to now enjoy improved download speeds by between 20% and 26%, and better signal strength by between 13% and 16%.

“Our initial plan was for 30% of our network to be integrated on 2023, 40% in 2024, and another 30% in 2025.

“We have achieved 35% in 2023 but we are still going after 40% in 2024 and another 25% in 2025,” Idham said.

He also noted that the group accelerated its capital expenditure (capex) investment as it ramps up the modernisation of its network.

CelcomDigi had guided that its capex intensity for 2023 will be around 15% to 18% of total revenue.

However, the group had utilised a total capex of about RM1.7bil last year, which translates into 13.8% of capex intensity.

“The company managed to optimise capex efficiencies while pushing ahead on prioritised network and IT integration initiatives. We were able to achieve more in terms of network and technology rollout at (35% of its network integration and modernisation target) instead of the initial target of 30% for a lesser amount of capex.

“This is why our capex intensity stood at 13.8% instead of 15% to 16%,” Idham clarified.

The company registered across-the-board improvements in its postpaid, prepaid, home fibre and enterprise segments, driven by enhanced 4G and 5G offerings introduced for all segments in the quarter.

“Uptake of these attractive offers added to customer confidence in the company’s network strength saw a record-breaking monthly average data per user for Digi customers reach 26.1 GB, up 6.5% year-on-year (y-o-y), while Celcom customers registered 31.2 GB usage monthly, up 11.8% y-o-y,” the company said in a statement.

Consequently, CelcomDigi recorded service revenue of RM2.7bil in 4Q23, and continued growing its quality subscriber base with additions of over 466,000 subscribers, bringing its total subscribers to 20.6 million.

Moreover, efficient cost management efforts strengthened earnings before interest, taxes, depreciation, and amortisation (Ebitda) by 2.6% y-o-y to RM1.6bil in 4Q23, delivering an Ebitda margin of 48.8%, while normalised profit after tax stood at RM507mil.

“We maintain a low single-digit increase in terms of service revenue for 2024. We are transitioning to provide guidance based on Ebit rather than Ebitda, because we are a capital-intensive company.

“We made a lot of investments last year and we are making a lot more investments in phase two and phase three of our integration. Hence, we are guiding that Ebit growth for 2024 will be at a similar level to 2023.

“As for capex intensity, we are guiding around 15% to 18% of our revenue,” Idham said.

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