Digi Q1 Revenues Higher but Profits Down on Costs

Malaysian mobile network, Digi.com has posted a 4% growth in revenue amounting to RM1.2 billion (US$337 million) for the first quarter, due to steady demand for mobile services and an increased subscriber base. However, net profit declined by 5% to RM275.4 million (US$77 million), due to higher debt costs and 3G spectrum write-downs.

Average revenue per user (ARPU) contracted to RM56 (US$15.73). Subscriber base stood at 7.2 million at the end of the quarter compared to 6.6 million in the same period last year.

Chief Executive Officer Johan Dennelind said that DiGi is pleased to have recorded positive momentum although at a lower level in light of challenging macro economy and weaker consumer confidence. He explained, "Overall, we saw reduced spend by the low income segments, which has, and will continue to impact our business as we have slightly higher exposure here. Nevertheless, we continue to attract customers who are looking for savings in tougher economic times by staying true to our best value promise."

On the prospects of the Group for the remaining year, DiGi expects the macroeconomic environment in Malaysia to continue to be challenging although it believes that telecommunications will be relatively resilient compared to other industries.

Dennelind added, "Tougher times have driven us to rethink, revitalize and rebuild our business focus and find new ways of doing things better to stay even more relevant to our customers and stakeholders. We are pushing for greater innovation as a catalyst for growth during the slowdown in order to better compete when recovery surfaces."

Posted to the site on 1st May 2009