KUALA LUMPUR: MARC Ratings has affirmed its AAAIS/Stable rating on Celcom Networks Sdn Bhd’s (CNSB) RM5bil Sukuk Murabahah Programme, supported by the strong credit profile of its ultimate shareholder CelcomDigi Bhd
.
CNSB is wholly owned by Celcom Bhd, which, in turn, is a wholly-owned subsidiary of CelcomDigi, and provides telecommunications network services across the group.
The rating agency said CelcomDigi’s leading position in Malaysia’s telecommunications industry, sound profitability and robust cash flow generation continued to underpin the rating.
These strengths are supported by resilient demand for connectivity and favourable industry prospects, although competitive pressures on margins and earnings as well as potential additional funding requirements for Digital Nasional Bhd (DNB) remain key considerations.
MARC Ratings said CelcomDigi maintained its market-leading position with about 20.3 million subscribers and an estimated 41% market share as at end-June 2026.
Despite limited subscriber growth and competitive pricing pressures in a mature market, revenue remained supported by resilient connectivity demand, rising data consumption and an improving customer mix.
The substantial completion of CelcomDigi’s network integration and modernisation programme would also allow the group to focus on operational optimisation and realise the remaining merger synergies.
CelcomDigi’s revenue grew 2.2% year-on-year (y-o-y) to RM13bil in 2025, although earnings before interest, taxes, depreciation and amortisation (EBITDA) fell 5.6% to RM5.47bil.
Higher network and traffic costs compressed its EBITDA margin to 42.2% from 45.7% in 2024. Nevertheless, EBITDA interest coverage remained strong at 9.6 times.
For the first half of 2026 (1H26), revenue was broadly unchanged y-o-y at RM6.4bil, while the EBITDA margin improved to 43.5% from 42.8%, partly due to operating cost savings.
MARC Ratings expects further operating efficiencies to partly offset continued competitive and cost pressures.
“Overall, MARC Ratings expects the group’s underlying profitability to remain resilient, supported by stable service revenue and further operating efficiencies,” it said.
CelcomDigi’s robust cash flow generation also remained a key rating strength, with cash flow from operations of RM4.8bil in 2025 and RM1.5bil in 1H26.
While sizeable capital expenditure and sustained dividend distributions have moderated deleveraging, MARC Ratings expects the substantial completion of the integration programme and moderating capital expenditure requirements to strengthen free cash flow generation over the medium term.
CelcomDigi’s borrowings increased to RM10.6bil as at end-June 2026, mainly due to investments in DNB and spectrum acquisition. Its debt-to-equity ratio remained manageable at 0.67 times.
MARC Ratings said DNB-related funding requirements remained the main uncertainty in CelcomDigi’s cash flow outlook.
Cumulative investment in DNB stood at RM879.9mil, with further funding potentially required to support its operations and network expansion.
However, the rating agency expects any additional commitments to remain manageable given CelcomDigi’s resilient cash flow generation, moderating capital expenditure requirements and established access to funding.
CelcomDigi is also expected to maintain sufficient liquidity to meet its debt obligations, including RM350mil of sukuk maturing in October 2026.
