DIGI SAYS THAT BUSINESS TRUST EXPECTS TO PAY 90% OF NET PROFIT AS DIVIDEND

DIGI.COM, which recorded a Net Profit of RM328.6m for 1QE Mar 2013 confirmed it is currently working on setting up a business trust. ” …. We are working on it (business trust) now and it has not been concluded yet. It is a new framework and it will be the first business trust in Malaysia, so we are evaluating it ….” said DIGI CEO, HENRIK CLAUSEN to STARBIZ on Apr 23, 2013. He did not commit to a timeline when asked.

A BUSINESS TRUST
Business trusts are business enterprises set up as a trust structure, managed by a trustee-manager which holds the assets on trust for unit-holders of the business trust. It has hybrid structures with elements of both a company and a trust. Business enterprises with stable growth and cash flow may now consider business trusts as an alternative structure to raise capital through initial public offerings in Malaysia.

The Celco’s Revenue for 1QE Mar 2012 rose to RM1.64 bil against RM1.56 bil a year ago, driven by increased data usage, from a larger mobile Internet subscriber base of 5.8m and higher sales of smart devices. Its EPS rose to 4.23 sen in 1QE Mar 2013 against 4.12 sen same quarter a year a go.

FORECAST OF 5% TO 7% REVENUE GROWTH FOR 2013
” …. We are on track for our 2013 guidance of 5%-7% revenue growth. Our first quarter revenue grew 5% and we are sticking to our guidance ….” CLAUSEN said, adding that it had earlier guided that DIGI was looking at sustaining its EBITDA and Cash-Flow Margin at 2012 levels.

DIVIDEND DECLARED
DIGI has also declared its 1st Interim Dividend of 3.8 sen, or RM295m, translating into a 90% Payout Ratio. ” …. We are sticking to our guidance of distributing 80% of our Net Profit as minimum payout ratio. We are paying 90% in the first quarter. We have been consistent ….” CLAUSEN said when asked if shareholders could be getting a higher dividend for 2013.

MOBILE INTERNET REVENUES
CLAUSEN said that its growth would largely be driven by its initiatives to increase mobile Internet revenues. It is looking to launch its 4G LTE services by the end of the second quarter 2013.
He said DIGI was currently modernising its network and expanding capacity to capture a bigger share of data revenues and grow its business in the long term. He added that DIGI had modernised 68% of its network and expanded 3G coverage to 68% of the population from 56% in 2012.

SINGLE RADIO ACCESS NETWORK WITH MULTI-SPECTRUM
” …. In the third quarter, we will have a brand new network ….” CLAUSEN said. He explained that the network would be a single Radio Access Network which was capable of delivering multi-spectrum data solution on the 2G, 3G and 4G-LTE bands from a single base station site.
On top of that, DIGI has completed a 800km joint fibre-optics built with CELCOM AXIATA.

1QE MAR 2013 SUBSCRIBER BASE LOWER AT 10.73M
In 1QE Mar 2013, DIGI’s total subscriber base was marginally lower at 10.73m as it embarked on initiatives to drive quality subscribers through higher SIM pack pricing and streamlining of sales acquisition and also higher prepaid rotational churn.
CLAUSEN said DIGI had embarked on initiatives to make people stay longer with the Celco. ” …. Our churn rate is at market level with postpaid of about 22% and prepaid of 60%-70% ….”.

MOBILE INTERNET SUBSCRIPTIONS
Nevertheless, its mobile Internet subscription recorded a 1.8% QoQ increase and 9.1% YoY. Its blended average revenue per user (ARPU) remained stable at RM47 in the first quarter of 2013.

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