DiGi.Com Bhd plans to pay 98 percent of its second-quarter profit as a dividend to shareholders including Norway’s Telenor ASA, which holds a 49 percent stake in the Malaysian mobile-phone operator.
DiGi’s profit rose 19 percent to RM278.4 million in the three months ended June 30, up from RM234.5 million a year ago, the company said in a statement today. The company earlier said it would pay a minimum of 80 percent of its profit as a dividend.
The ratio is more than domestic rivals Maxis Bhd, Malaysia’s biggest mobile-phone operator, which is targeting a minimum 75 percent payout this year, and Axiata Group Bhd which retains all its profits to reinvest. Mobile phone subscriptions in Malaysia exceed the country’s population, suggesting few opportunities for expansion, a fund manager said.
“It’s good returns for investors, but also hints that there is limited scope for future growth,” said Ang Kok Heng, who oversees $150 million as chief investment officer at Philip Capital Management Sdn Bhd in Kuala Lumpur.
DiGi’s shares rose 0.4 percent to close at RM23.66 in Kuala Lumpur after announcing its earnings, the highest since Sept. 2008.
Revenue rose 11 percent to RM1.34 billion, DiGi said. The company had 8.1 million customers, up from 7.9 million at the end of March, it said.
DiGi still plans to invest in new products and network expansion, Chief Executive Officer Henrik Clausen said in the statement.
It aims to expand its 3G network reach to cover 50 percent of Malaysia’s population by the end of this year, up from around 35 percent, the statement said.
The dividend will be paid on Sept. 24, the company said. - Bloomberg
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