Maxis Q3 profit falls 18% to $145m

Fiona Chau
29 Nov 2012

Malaysian telecom operator Maxis said its profit for the third quarter dropped 17.7% due to rising sales cost and shrinking revenue.

Net profit for the three months ended September 30 fell to 443 million ringgit, while revenue fell 1% to RM2.22 billion ($728.3 million).

Sales cost, meanwhile, rose to RM746 million ($244.7 million) from RM 707 million ($232 million) a year earlier, the company said in a filing.

For the nine months ended September 30, profit after tax dropped 9.1% to 1.482 billion ringgit. Revenue rose 1.9% to 6.661 billion ringgit, while EBITDA stood at RM3.294 billion with EBITDA margin at 49.5%.

Maxis said PAT performance for both the nine months and the third-quarter was impacted by accelerated depreciation for network modernization. Also constraining nine-month PAT was a 125 million ringgit writedown.

The operator, which invested nearly 400 million ringgit in the first nine months on upgrading and modernizing its network, expects to increase its capex to support new IT initiatives and on-going network investments in the fourth quarter. Yet overall 2012 capex is expected to be below guidance.

Maxis added 78,000 new customers, lifting it total subscriber base to 13.9 million - of which 12.8 million users were signing up its wireless broadband services, thanks to the aggressive market initiatives it launched during the period.

"We are now well positioned to strengthen future revenue streams, having launched several tariff initiatives for our customers, over the last nine months, in the areas of IDD rates, roaming, mobile Internet, postpaid and prepaid. All of which are beginning to bear fruit. It is also reassuring to see that revenue generating subscribers growing in both postpaid and prepaid categories,” Sandip Das, CEO at Maxis said

Sandip expected that pressure on margins from aggressive marketing will continue.

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