Maxis Q1-2019 earnings down 22%

Maxis Bhd’s net profit for the first quarter ended March 31, 2019 fell 22% to RM409 million from RM523 million a year ago attributable to the decline of wholesale revenue due to the termination of the network sharing agreement, continued investment in FibreNation and mobilisation of the enterprise business growth opportunities.

Revenue was flat at RM2.23 billion compared with RM2.24 billion in the previous year’s corresponding quarter.

Its board of directors has declared a first interim single-tier tax-exempt dividend of 5.0 sen per share.

Maxis said there are a few key items impacting the group in 2019, including the impact of changes to a major wholesale network sharing agreement in Q119 and Q219, dilution in fibre average revenue per user from the new competitive priced plans and the cost of customer migration initiative coupled with the increase in cost to serve; as well as the increase in cost of business from the Sales & Service Tax.

Its guidance for the financial year ending Dec 31, 2019 remains unchanged.

It expects service revenue and earnings before interest, tax, depreciation and amortisation to decline by low single digit and mid-single digit respectively; core network capital expenditure to be around RM1 billion plus capex supporting new growth opportunities in broadband and enterprise business (around RM1 billion over three years); and operating free cash flow (excluding upfront spectrum fee assignment) at a similar level to year 2018.

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