3 days ago
Improved quarter two earnings for CelcomDigi, supported by lower staff costs and device sales
CELCOMDIGI's results were a slight miss, with core earnings before interest and tax (EBIT) up 9.2% in the first half of 2025 (1H25). With IT transformation cost and depreciation set to rise in 2H25, EBIT growth should normalise to guided levels.
Service revenue was flattish in 1H25 with weaker prepaid revenue partly buffered by stronger home fibre and postpaid revenues.
Quarter two 2025 (2Q25) EBIT improved 6% quarter-on-quarter (QoQ), mainly on lower staff cost with MYR41 mil in 1Q25 redundancy cost booked and device sales.
Prepaid revenue dipped by a marginal 0.6% QoQ on seasonality (lower reloads and gaming spend). A clean-up of the prepaid registry also crimped prepaid subs after two quarters of marginal growth.
Home broadband revenue and subs hit quarterly highs, up by double digits YoY or QoQ, thanks to the strong take-up of the converged (CD One) plans where a third of fibre gross additions originate.
CDB said 5G wholesale costs have been steady. While network integration has reached 84% (end June), the pace appears to have slowed over the quarter which we believe could be due to protracted discussions on remaining sites.
Management said the industry has made some progress on the discussions with the Government on the expanded Sales & Service Tax (SST) levied on tower rental/leases, with a worst-case impact of MYR100 mil on an annualised basis.
Management has reaffirmed its guidance of low- single-digit service revenue growth, EBIT growth of low-to-mid-single digit and capital expenditure intensity of 14-16% for financial year 2025.
This implies slower EBIT growth in 2H25 on higher depreciation (new network assets) and integration costs, with IT transformation investments to peak in 4Q25. —Aug 19, 2025
Main image: amanz
