DiGi.Com Berhad Q1-2005 results April 26, 2005 Morten Lundal, CEO Johan Dennelind, CFO 1 26 April 2005
Contents DiGi in Q1 2005 Numbers in brief Key Financials & Operational Indicators Outlook 2005 2 26 April 2005
DiGi in Q1 2005 By Morten Lundal, CEO 3 26 April 2005
DiGi in Q1 2005 Positive start for the year Good subscriber growth Stable revenue growth EBITDA margin holding up; pressure on ARPUs High cash flow Product innovations & customer segmentation key growth drivers 4 26 April 2005
Numbers in brief Customer base at 3.46 mil Up 7% from Q4 04 (3.24 mil) ; Up 43% from Q1 04 (2.41 mil) Revenues at RM 626 mil Up 3% from previous quarter; Up 21% from same period last year Mobile revenue up 6% from last quarter EBITDA at RM 275 mil Up 3% from last quarter; Up 17% from same period last year Profit after tax at RM 58 mil Down 39% q-on-q; Down 21 % from same period last year Q105 decline due to accelerated depreciation EPS at 7.7 sen Versus 9.8 sen in the same period last year 5 26 April 2005
Innovation & segmentation drive DiGi s growth YTD 2005 1st High Speed Mobile Network EDGE RM10 reload coupon RM18 SIM pack launch flexieload and Talktime transfer services 1/15 FnF rates BubbleTalk Bubble Talk 48/sen IDD Call 0 Monthly Fee Tailor Made for SMEs MMS Frenzy DiGi - always the smarter choice 6 26 April 2005
Key Financials & Operational Indicators By Johan Dennelind, CFO 7 26 April 2005
Approaching 3.5 million customers +43% Customers* ( 000) +7% Subscriber growth still high but lower than Q4 Total subscribers Market share 2,413 2,205 2,583 2,804 3,239 3,461 20.6% 20.9% 21.5% 22.2% 20.1% * Restated based on new definition Q4 2003 Q1 Q2 Q3 Q4 Q1 2005 8 26 April 2005
Growth in both postpaid and prepaid 42% Prepaid growth 80% Postpaid growth Customers* ( 000) 6% Prepaid growth 17% Postpaid growth Prepaid growth still high, but lower than Q4 Growth in postpaid gaining momentum 104 2101 112 2301 130 2453 151 2653 172 3067 202 3259 * Restated based on new definition Q4 2003 Q1 Q2 Q3 Q4 Q1 2005 Prepaid Postpaid 9 26 April 2005
Sound quarterly revenue growth Revenues* (RM mil) EBITDA % Revenue growth driven by subscriber growth EBITDA margin stable at 44% Mobile Revenue Other revenue EBITDA margin 517 533 486 43.7% 45.3% 42.6% + 21% total rev growth +28% mobile rev growth + 3% total rev growth +6% mobile rev growth 626 606 577 43.3% 44.2% 44.0% 415 446 457 504 540 571 * Restated based on new definition Q4 2003 Q1 Q2 Q3 Q4 Q1 2005 10 26 April 2005
EBITDA continues to improve EBITDA EBITDA \ CAPEX RM mil CAPEX +17% EBITDA growth in line with revenue growth +3% Higher A&P held back EBITDA somewhat 212 288 234 227 250 268 275 249 Network expansion on target, lower capex in line with historic pattern 57 89 129 66 Q4 2003 Q1 Q2 Q3 Q4 Q1 2005 11 26 April 2005
Very strong quarterly cash flow improvement + 17% RM mil operating cash flow* + > 100% High Q105 cash flow due to lower CAPEX and higher EBITDA 178 138 121 209 Cash used for prepaying RM300 million of existing debt 19-76 Q4 2003 Q1 Q2 Q3 Q4 Q1 2005 * Operating Cash Flow = EBITDA - CAPEX 12 26 April 2005
Profit after tax declined 21% (YoY) -21 % PAT (RM mil) & margin % Net profit affected by accelerated depreciation & higher finance costs EPS declined to 7.7 sen against 9.8 sen in previous corresponding period PAT 95-39% PAT margin 83 73 66 58 56 11.5% 15.7% 14.2% 14.3% 12.4% 9.3% Q4 2003 Q1 Q2 Q3 Q4 Q1 2005 Depreciation, Amortisation & Write-down 174 113 116 115 118 121 Q4 2003 Q1 Q2 Q3 Q4 Q1 2005 13 26 April 2005
ARPU and AMPU under pressure blended ARPU* (RM) ARPU lower due to high uptake of new subscribers - 11% -5% Chinese New Year and shorter quarter impact ARPU/AMPU Restated figures exclude inbound roaming 64 63 175 167 60 61 59 170 164 165 56 163 * Restated based on new definition Q4 2003 Q1 Q2 Q3 Q4 Q1 2005 ARPU (MYR) AMPU 14 26 April 2005
Postpaid and prepaid ARPU lower prepaid & postpaid* ARPU (RM) Drop in Postpaid due to lower business activities during Chinese New Year 177 171 173 164-10% Prepaid - 17% Postpaid -5% Prepaid -1% Postpaid 143 142 Some dilution in Postpaid ARPU due to uptake in non-business segment Prepaid ARPU pressured by new subscribers * Restated based on new definition 58 57 54 55 54 51 Q4 2003 Q1 Q2 Q3 Q4 Q1 2005 Prepaid Postpaid 15 26 April 2005
Prepaid AMPU stable - 3% Prepaid; - 8% Postpaid blended AMPU* (minutes) - 1% Prepaid; - 7% Postpaid Voice AMPU reduced as shift to data usage continue to increase 528 503 517 528 499 465 AMPU slower in postpaid due to Chinese New Year 158 150 146 150 146 145 Q4 2003 Q1 Q2 Q3 Q4 Q1 2005 * Restated based on new definition Prepaid AMPU Postpaid AMPU 16 26 April 2005
Continued growth in Data revenues non-voice revenues* MYRm % mobile revenue-own sub 54% VAS growth Comprised of SMS, MMS, CPA, GPRS & EDGE; driven by SMS Other innovations launched : Bubble Talk, FriendFinder, LifeLogger & extension of HighSpeed Data Package 54 13.0 % 61 14.1 % 63 14.1 % 73 14.9 % 9% VAS growth 94 86 16.3 % 16.7 % Restated due to new definition Q4 2003 Q1 Q2 Q3 Q4 Q1 2005 17 26 April 2005
Operating expenses ( opex ) as % of revenue Opex (% of revenue) Q1 2005 Q4 Change Cost of Materials 3.5% 4.5 % +1.0% Traffic Charges 18.7% 17.7% -1.0 % Sales & Marketing 13.3 % 12.5 % -0.8% Staff 4.5 % 5.3 % +0.8% Operations & Maintenance 6.9 % 6.4 % -0.5% Other Opex 9.1 % 9.4 % +0.3% Total Opex 56.0 % 55.8 % -0.2% EBITDA margin 44.0 % 44.2 % +0.2% 18 26 April 2005
Balance Sheet Main items RM million Q1 05 Fixed Assets Intangible assets Deferred exp Current assets Current liabilities -ST borrowings Financed by:- Shareholders funds Long term & Deferred liabilities -LT borrowings 2,580.3 38.1 3.8 610.6 1,028.2 195.6 ---------- 2,204.6 ===== 1,835.2 369.4 142.2 ------------ 2,204.6 ====== 2,686.9 39.1 15.2 825.1 1,133.6 224.6 --------- 2,432.7 ===== 1,777.2 655.5 455.3 ----------- 2,432.7 ====== Partial prepayment of RM300 mil on existing borrowings; gross debt-to-equity ratio has improved to 16% from 28% As of Q105, borrowings were reduced to RM337.8 mil which was subsequently repaid in full by drawing down on new credit facility and excess cash 19 26 April 2005
Looking ahead Market Expectations Operational Priorities Financial Outlook Sustained but reduced subscriber growth More segmented subscriber acquisition strategies High churn will continue to be a phenomena Data becoming more important Maintain high pace of innovation Equal on voice coverage Always wider high speed data network coverage - ongoing EDGE expansion Focus on loyalty and retention programs Customer base growth and ARPU decline as assumed EBITDA margin under pressure (2005 likely < ) Market competition Coverage expansion No dividend 2005 20 26 April 2005
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