DiGi’s 9-month net profit increases 10.5%

DiGi Telecommunications Sdn Bhd, Telenor’s mobile phone operation in Malaysia, recorded a higher pre-tax profit of MYR120.1 million for the nine months ended 30 September 2003, representing an improvement of 7.6% over the MYR111.6 million recorded in the corresponding period last year.
     The group consequently registered a net profit of MYR86.2 million, which is 10.5% higher than the MYR78.0 million recorded in the previous corresponding period.
     The improved performance was mainly attributed to the 33% increase in revenue to MYR1,227.2 million from MYR919.8 million previously recorded. The higher revenue growth, largely contributed by the group’s mobile segment, was spurred onwards by the 41% growth from a year ago in its mobile customer base which hit 2.06 million at end-September.
     “Our strong operational performance is reflected in the positive operating cash flow of MYR211 million for the first nine months of this year, which has been sustained since the beginning of this year,” commented DiGi’s chief operating officer Tore Johnsen, on the group’s performance.
     “This was achieved despite the intensifying competition in the mobile communications market, especially in the prepaid segment,” he added.
     “We are equally satisfied with our consistent earnings before interest, tax, depreciation and amortisation (EBITDA) achievement, which has increased 49% to MYR486.4 million from MYR326.8 million recorded in the previous corresponding period. In fact, we are pleased to note that our EBITDA margins have improved to 40% from 36% recorded previously,” continued Johnsen.
     The group’s pre-tax profit for the 3rd quarter ended 30 September 2003 surged 308.2% to MYR43.0 million, largely attributed to the 35% growth in revenue to MYR434.2 million as compared with the previous corresponding quarter, while EBITDA margins improved to 39% from 34%. Accordingly, the group’s net profit for the 3rd quarter of this year jumped to MYR33.2 million as compared with MYR5.9 million recorded last year.
     Digi has close to a 20% share of the local cellular market, in which Celcom (M) Bhd is the leader, followed by Maxis Communications Bhd.
     The biggest challenge to be faced by operators next year is to increase the usage of mobile data, such as SMS, to drive revenues since growth levels are expected to slow down.
     Johnsen said although DiGi was smaller than its two rivals, it was a much “leaner and cost effective organization and is able to develop new things faster.”
     “It is a fact we are smaller but we look at that as an opportunity. We are able to remain very competitive in this market and do not see any obstacles ahead.”

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