Maxis Q2 - In Steady Progress

Service revenue growth 0.6% from Q1 2014Mobile Internet/Value Added Services revenue growing 8.0% from Q1 2014
Solid EBITDA margin on service revenue (normalised) at 53.5%
Good progress in network modernisation with key market centres approaching completion
Delivering on dividend commitment; declared a second interim dividend of RM600 million or eight sen per share
Maxis Berhad (Maxis) continued with its transformation initiatives and remained focused on going through the list of things to improve to provide customers with an unmatched experience.

For the second quarter ended 30 June 2014, Maxis returned to positive growth of 0.6% in its Service Revenue to RM2,049 million against RM2,037 million in Q1 2014. Mobile data was the main growth driver with Mobile Internet/Value Added Services revenue growing 8.0% from the previous quarter, partially mitigating lower voice and SMS usage. This growth was achieved through initiatives undertaken in Q1 to eliminate pay per use charges and driven by higher smart-phone penetration. Maxis also saw its worry free internet proposition beginning to gain traction as well as steady contributions from the Home and Enterprise Fixed segments.

For the quarter under review, Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) Margin on service revenue improved by 0.5 percentage points to 53.5% as compared to Q1 2014. Overall EBITDA and Profit After Tax (PAT) on a normalised basis stood at RM1,064 million and RM480 million respectively.

Morten Lundal, Maxis CEO, said, “Our numbers in Q2 are as expected as we continue with our transformation initiatives. This quarter, we made a fundamental change in postpaid with our MaxisOne Plan, by offering truly limitless voice and SMS as well as a generous and worry free data offering.  With this change, the whole focus on how much you call or SMS are gone – a truly new experience for the Malaysian market specifically and also a first in Asia.  We also made both prepaid and postpaid roaming a worry-free experience for customers.  Customers can now feel free to use their phones while travelling whilst keeping their mobile data on. Furthermore, we took away the very high pay per use rates for data that all the players in the industry charge and that the customers feel so deeply unhappy about. We took some hit in our revenues due to all these changes, but we are also seeing the positive response this has generated. As we go along this year, customers are going to see more product launches that substantiate our commitment to delivering a worry free Internet experience on the best network."

Maxis also made good progress in its network modernisation with key market centres nearly completed. Transport and core network was successfully expanded to support data traffic growth. Our 3G population coverage is expected to reach 88% by end of 2014. Maxis invested RM155 million capital expenditure in second quarter for network modernisation, capacity and quality improvements as well as focused 4G coverage expansion.

The Company announced a second interim dividend of RM600 million or eight sen per share.