Digi.com Berhad (Digi) reported its second quarter 2020 (2Q20) financial results today. The Telco has 10.62 million subscribers, down from 11.01 million as of 1Q20. It lost a total of 385k mobile subscribers between April, May and June 2020.
Digi said the drop in mobile subscribers was “due to a decrease in non-active users, lesser on-ground activities on our channels, leading to involuntary churn, no inbound subscriptions and continued sim consolidation.”
As of June 2020, there are 7.59 prepaid subscribers compared to 7.95 million in the previous financial quarter. The prepaid subscriber base is down by 356k in the latest quarter. There are 6.02 million prepaid Internet subscribers and 1.58 million non-mobile Internet subscribers.
The postpaid subscriber base stood at 3.03 million as of June 2020, down by 29k from 3.06 million subscribers in March 2020. About 2.7 million postpaid subscribers are mobile Internet users while some 340k postpaid subscribers don’t use the Digi mobile Internet services.
Digi reported a lower number of mobile Internet subscribers at 8.71 million compared to 9.19 million as of 1Q20. It lost 484k mobile Internet subscribers despite observing higher Internet consumption during the Movement Control Order (MCO) period during March-April 2020.
From April to June 2020, Digi mobile subscribers consumed an average 18GB of Internet (Average- Postpaid 24.1GB, Prepaid 15.3GB), the highest Internet usage the Telco ever reported. Digi said the higher data quota utilisation was for remote working and online learnings. The Telco gave free 1GB mobile Internet quota to subscribers to during the MCO period.
In 2Q20, Prepaid ARPU dropped to RM29 (-RM1 Q-Q) while Postpaid APPU was at RM68 (-RM1 Q-Q).
In terms of mobile network performance, Digi said it “was able to sustain #1 position on network consistency and download throughput with minimal quality degradation as measured by third party data.” No further details were provided regarding the measurement.
Digi’s 4G LTE human population coverage remains unchanged at 91% since 4Q19, measured at the weakest possible signal strength. 4G LTE-A (4G+) coverage is up by 1% to 74% in 2Q20. It claims that the network team successfully deployed an additional 29% Y-Y of new and upgraded sites in 1H2020. However, the Telco did not disclose the exact number of 4G LTE sites it has deployed to date.
Monthly active users on MyDigi was reported at 4.3 million with upsell transactions recorded at 16.7 million.
Digi Financial Results in 2Q20:
Key Financial Highlights (Y-o-Y), according to Digi:
- Service revenue contracted 6.1% y-o-y to RM1,317 million due to impact on roaming revenues, free connectivity to support customers, and decline in traditional voice usage during the MCO
- Internet and digital revenue rose 8.0% y-o-y to RM953 million or 72.4% of service revenue
- Postpaid revenue eased 1.2% y-o-y to RM639 million over a steady base of 3.0 million subscribers
- OPEX improved 7.0% y-o-y to RM369 million
- EBITDA at RM770 million or 53% margin while Profit After Tax (PAT) was RM288 million or 19.8% margin
- Ops cash flow at RM545 million or 37.5% margin having invested RM225 million capex1 for network enhancements
- Net debt to EBITDA ratio healthy at 1.5 times while conventional debt over total assets was at 8.2%, well-within the Shariah threshold
- Second interim dividend of 3.7 sen per share or RM288 million, payable to shareholders on 25 September 2020
Digi said that mobile service revenue contracted by -5.0% Q-Q and -6.1% Y-Y due to weaker data monetisation, as a result of industry-wide free data and softer acquisitions hampered by closure of physical channels. In addition, Digi’s performance was also impacted by lower traditional voice and roaming revenues due to closed borders.
Digi’s CEO Albern Murty said, “This was a well-fought quarter with a solid focus on operational efficiency driving business resilience, and on network excellence to support growing customer demand amid impact from Covid-19. As we see run rates gradually return in June, we believe these proactive and well-coordinated business continuity efforts position us well to drive continued operational resilience in the second half of 2020. Our focus is to deliver business priorities to create value for stakeholders and to play a key role in supporting the society’s recovery in the new normal.”