KUALA LUMPUR (July 15): Digi.Com Bhd's second quarter (2Q) net profit dropped 21.39% to RM220.04 million, from RM279.91 million a year earlier, due to the one-off prosperity tax and the increased net finance costs as a result of non-cash hedge accounting.

Earnings per share for the quarter ended June 30, 2022 slipped to 2.83 sen from 3.6 sen previously, the group's Bursa filing showed.

"The group's effective tax rate for the current quarter and financial period ended June 30, 2022 of 39.2% and 38.1% respectively are above the statutory tax rate of 24% due to prosperity tax impact arising from the one-off tax measure proposed by the government of Malaysia in Budget 2022," said Digi.

Quarterly revenue fell 4.92% to RM1.54 billion from RM1.62 billion as the steady growth in postpaid, business-to-business and fibre segments from quality acquisitions and attractive bundles were unable to offset weaker prepaid in 2021.

On a quarter-on-quarter basis, Digi's net profit slipped further from RM236.15 million in the immediate preceding quarter while revenue was marginally up from RM1.52 billion.

The mobile telecommunications network provider declared a second interim dividend of 2.8 sen per share, to be payable on Sept 30, 2022.

In a separate statement, Digi said it continued investments in strengthening its network quality and availability, with capital expenditure (capex) amounting to RM175 million, or capex-to-total revenue ratio of 11.4% in the April-June period.

The group said demand for data continued to surge, with total data traffic rising 4.9% year-on-year, while monthly average data per user stood at 21.9 GB.

Digi said its average download speed further improved to 44.1 Mbps from 42.2 Mbps in the last quarter, reflecting the company's network leadership position and its commitment to providing the fastest and most consistent network experience to its customers.

Digi added that its stronger network quality, coupled with improved efficiencies and focused execution of its business strategies generated healthy subscriber base growth in its core segments.

Postpaid subscribers grew for the seventh consecutive quarter, with 183,000 net additions to a total of 3.36 million subscribers, as a result of attractive bundling offers anchored on Digi's high-speed internet proposition.

Meanwhile, prepaid subscribers returned to growth with 96,000 additions to 7.13 million subscribers.

Blended mobile average revenue per user remained resilient at RM42, said Digi.

Looking ahead, Digi said the first half of the year saw robust domestic economic growth largely driven by rising demand as economic activities normalised with the easing of containment measures.

Digi's share price closed two sen or 0.59% higher at RM3.42 on Friday, giving the group a market capitalisation of RM26.59 billion.