KUALA LUMPUR (Aug 8): CelcomDigi Bhd (KL:CDB), Malaysia’s largest mobile network operator by subscribers, and internet service provider Time dotCom Bhd may report weaker-than-expected results, CIMB Securities flagged.

Core net profit for CelcomDigi may come in at RM470 million to RM490 million, down 4-8% on a year-on-year basis, for the second quarter (2QFY2024), CIMB said in the sector results preview. First-half (1H) core earnings may lag behind and make up 42-43% of consensus full-year forecast, it noted.

Dividends from CelcomDigi however should be in line with market expectations at 3.5 sen per share, CIMB said. Service revenue is likely flat on continued churn of one-time prepaid SIM cards from re-pricing in March while operating profit could be up, thanks to lower device and staff cost, it said. 

CelcomDigi is expected to announce its results on Aug 19 and close rival Maxis Bhd (KL:MAXIS) on Aug 21, while fixed-line operators Telekom Malaysia Bhd’s (KL:TM) results may be out on Aug 28 and Time dotCom is scheduled to announce its results on Aug 26.

Time may also miss estimates, and is likely to experience moderate growth in recurring revenue for 2QFY2024, driven by its enterprise, cloud, and retail broadband segments.

The company may report core net profit of RM97 million to RM103 million, or up to 6% growth, based on seasonally higher operating expenditure, normalising earnings from Symphony and no non-recurring revenue, according to CIMB’s estimates.

Time’s 1H core earnings may track slightly behind at 44-45% of consensus’ FY2024 forecast and it remains unclear whether the company will pay any dividend during the quarter or wait until the year-end, it said.

Telekom Malaysia, however, may outperform market expectations on lower operating expenditure and interest cost savings, CIMB said.

Headline net profit may fall 24-28% year-on-year due to voluntary staff separation cost, while 2QFY2023 was also boosted by positive tax credits, according to CIMB’s estimates. However, core net profit for 1H may still be slightly ahead of consensus at 55-57% of FY2024 forecast, it said.

Revenue will likely be stable in 2QFY2024 as growth at TM Global is offset by decline at TM One and flattish Unifi business, CIMB said.

For Maxis, core net profit could be up 5-11% year-on-year at RM350 million to RM370 million, driven by 4G network sharing fees from Telekom Malaysia since August 2023 and “resource optimisation” initiatives, CIMB said. The company may declare dividend of four sen per share, the house said.

Service revenue is probably flat quarter-on-quarter and up 3-5% year-on-year with “some growth in postpaid mobile offset by flat to softer prepaid and Home revenue” from intense competition, CIMB said. Operating profit meanwhile could be may edge higher up to 2% quarter-on-quarter or as much as 6% year-on-year, mainly on seasonally lower device costs, CIMB added.  
 

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