KUALA LUMPUR (May 21): Starting off as the smallest of the Big Three telcos, DiGi.com Bhd has enjoyed phenomenal growth over the years that has made it a darling dividend stock, according to the Edge weekly in its latest edition.
In its cover story, the Edge’s Ben Shane Lim wrote that that was in the recent past.
CEO Albern Murty, who took the helm in April last year, faces what is arguably the most challenging transition period for the industry yet, he wrote.
The weekly reported that between the structural shift in consumer behaviour towards data, weakening economic fundamentals and increasing competition that has precipitated a price war, DiGi in 2015 posted its worst year-on-year earnings performance in almost a decade.
It is a great time to be a consumer and a tough time to run a telco, but Murty certainly isn’t on the back foot, it said.
Citing Murty, the Edge said it had been an extremely interesting year.
“I have been with DiGi for a while (since 2002), so I know the challenges and the opportunities that are coming. It is an extremely interesting period to take this challenge up,” Murty told The Edge in his usual energetic and chatty manner, i said.
The weekly said that if he is feeling the pressure, he certainly does not show it.
The Edge said in FY2015 ended Dec 31, DiGi’s earnings before interest, tax, depreciation and amortisation (Ebitda) contracted for the first time in over five years, down 5.69% to RM2.98 billion. Meanwhile service revenue growth almost ground to a halt, rising only 0.24% y-o-y to RM6.35 billion, compared with 3.3% growth in the previous year.
In line with weaker earnings, dividends were trimmed by nearly 15% y-o-y, which has been reflected in DiGi’s share price — down almost 24% since Murty took over.
“It was not surprising that we had a rough 2015 as an industry, partly because the industry contracted. We had GST, some economic challenges, and also [weakening] exchange rates,” Murty tells The Edge.
On what lies ahead for DiGi, and how Murty plans to steer the company going forward, read the Edge weekly edition for the week of May 23-May 29 available at newsstands now.
DIGI (6947) - Digi - Innovate OR stagnate
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