Maxis Q1 2017 profits fell marginally, due to forex loss
By Goh Thean Eu April 27, 2017
- It was a good and steady quarter for Maxis with positive underlying momentum, said CEO Morten Lundal
- During the quarter, its prepaid subscriber base fell by 140,000 at 8.82 million
MAXIS Bhd, one of the country's top mobile operator, reported a marginal decline in its first quarter net profit at RM505 million, mainly due to foreign exchange (forex) losses.
For the first quarter ended March 31, 2017, the company reported a forex loss of RM5 million. In contrast, the company recorded forex gains of RM43 million first quarter last year.
On a normalised basis (without factoring one-off costs and forex gains/ losses), the company would have registered a net profit of RM510 million, a 5.4% increase from the normalised net profit of RM484 million first quarter last year.
"It was a good and steady quarter for Maxis with positive underlying momentum. Data volume keeps growing and we are matching the demand with a high performing network experience," said Maxis chief executive officer Morten Lundal (pic above) in a statement.
"This is a very important year for us, where we will be going all out digital to create unmatched customer experiences."
Regain postpaid momentum
During the quarter, the company managed to grow its postpaid subscriber base at 2.988 million, an 22,000 postpaid subscribers against the 2.966 million in the fourth quarter. The first quarter postpaid net addition is far stronger than the 5,000 net addition it recorded in fourth quarter 2016.
The jump in postpaid subscriber base is mainly driven by the demand for its MaxisONE plan. It now has 1.788 million MaxisONE customers -- 132,000 more than what it had in fourth quarter last year. In terms of revenue, the company's quarterly postpaid revenue is currently hovering around the RM1 billion level.
The increase in postpaid subscriber base is crucial, as it gives Maxis the much needed space to maintain its lead in the postpaid subscriber base market share. To recap, Maxis ended the fourth quarter 2016 with 2.97 million postpaid customers, just 10,000 ahead of Celcom's 2.96 million postpaid customers. In terms of postpaid market share, Maxis was leading by a mere 0.2 percentage points at 37.0% (Celcom postpaid subscriber market share: 36.8%).
Although postpaid subscriber base showed improvement, its overall subscriber base still suffered a decline of 118,000 subscribers. During the quarter, its prepaid subscriber base fell by 140,000 at 8.82 million.
The decline in prepaid subscriber base is mainly driven by the decline of subscribers using the conventional prepaid plans.
In contrast, its Hotlink FAST prepaid customer base, which are generally generating higher average revenue per user, is expanding. It now has 1.74 million Hotlink FAST customers -- which is 240,000 more than what it had in fourth quarter 2016, and 1.52 million more than what it had a year ago.
Despite the gradual decline in its overall prepaid subscriber base, its quarterly prepaid revenue managed to stay above the RM1 billion mark.
Other key metrics
During the quarter, Maxis - controlled by billionaire Ananda Krishnan - recorded an increase in revenue at RM2.16 billion (versus RM2.14 billion same period a year ago).
The quarter also saw a marginal increase of its service revenue at RM2.13 billion, from RM2.12 billion a year ago. (Service revenue does not take into account of sales of mobile devices).
While its earnings before interest, tax, depreciation and amortisation (Ebitda) margin decreased by 2 percentage points at 52.5%, it is still significantly higher than its peers in the country.
The company, which spent RM448 million on capital expenditure in fourth quarter 2016, spent just RM162 million in capex during the first quarter 2017.