KUALA LUMPUR, July 18 — Digi.com Bhd’s (Digi) share price on Bursa Malaysia eased in the morning session today after the company posted a lower net profit of RM220.04 million for the second quarter ended June 30, 2022 (Q2 2022) against RM279.91 million in Q2 2021.
At 10.52am, the counter shed four points or 1.17 per cent to RM3.38.
In a note today, MIDF Research said Digi’s Q2 2022 normalised profits were 23.9 per cent lower year-on-year (y-o-y) at RM213.0 million, mainly due to higher net financing expenses and higher tax provision related to Cukai Makmur.
“The normalised profits came in below our and consensus expectations, accounting for 40.0 per cent and 41.5 per cent of full-year earnings estimates, respectively,” it said.
Overall, the research house had maintained its ‘neutral’ call on Digi’s shares, noting that potential negative risks include lower-than-expected profitability, increased mobile competition, a delayed merger completion, and uncertainty over the 5G network rollout.
Meanwhile, PublicInvest Research said the merger between Digi and Celcom is expected to be completed by year-end after receiving regulatory approval.
According to its preliminary estimates, Digi could see a slight earnings per share (EPS) enhancement of about two per cent post-merger, it said.
“Operationally, we do not expect any major impact in the immediate term with management focusing mainly on the integration phase.
“In the medium term, we believe there are synergies to be reaped in terms of sharing of resources, network optimisation and lower procurement cost due to better scale in purchases,” it said. — Bernama
