U Mobile capex to hit RM3bil for 5G rollout
U Mobile posted a net loss of RM722 million for the financial year, a sharp reversal from the RM102 million net profit recorded in financial year 2023 (FY23).
The loss was mainly attributed to an accelerated depreciation charge of RM489 million, as the telco shortened the useful lifespan of its telecommunications equipment ahead of its 5G network rollout.
"Excluding this, forex losses, and interest costs from shareholders' advances (SHA) and redeemable convertible preference shares (RCPS), we estimate a core net loss of RM19 million versus FY23 core net profit of RM295 million," CIMB Securities said.
The firm said U Mobile recorded a 3.4 per cent increase in service revenue for financial year 2024, outperforming both Maxis Bhd and CelcomDigi Bhd.
As a result, its mobile service revenue market share (RMS) rose by 0.4 percentage points on a yearly basis to 15.7 per cent.
"Excluding SHA and RCPS, the telco company's net debt, including finance leases and vendor financing, fell three per cent to RM2.70 billion at the end of financial year 2024 (FY24)," it said.
CIMB Securities noted that U Mobile's capital expenditure in FY24 remained relatively low for the third straight year, amounting to RM189 million, or 5.1 per cent of its revenue.
This reflects the telco's targeted 4G investments and continued reliance on Digital Nasional Bhd's 5G network to handle traffic.
"Still, the latest Opensignal network test indicates that U Mobile's scores for overall download speed and video and games experience have been improving, although it ranked either third or fourth in these categories among the telcos," CIMB Securities added.
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