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MANAGEMENT DISCUSSION & ANALYSIS
Cost and Margin Review
DiGi placed significant importance on sustainable operational
efficiencies to support its growth and to deliver the best
customer experience.
Cost of goods sold (COGS) and operational expenditure (Opex)
were managed prudently, driven by strong cost management
discipline throughout the organisation, with visible efficiencies
obtained from the recently completed network modernisation
exercise.
Overall, the Opex to revenue ratio improved to 24.9% (2012:
25.5%) on the back of a larger nationwide network footprint.
The increase in devices sold during the year contributed to
higher COGS to 30.3% (2012: 28.8%).
EBITDA margin continued to remain resilient at 45% while
EBITDA to service revenue ratio was kept at 50%.
Profit Before Tax (PBT), Net Profit and D&A
DiGi’s net profit margin rose to 25% (2012: 19%) as a flow-
through from improved OPEX to revenue, more efficient D&A
charges following the completion of the network modernisation
exercise, and lower effective tax rate from higher qualifying last
mile broadband tax incentives.
The remaining accelerated depreciation of RM153 million
(2012: RM575 million) and normal depreciation on the old
network equipment have been fully charged out in the year,
following the completion of the network modernisation exercise.
Moving forward, D&A will continue to benefit from the improved
network asset base. The future investments to expand DiGi’s
fibre transmission network, high-speed data coverage (3G/
HSPA+ and LTE), and investments on information technology
(IT) modernisation initiatives will be subject to the usual
depreciation rate and its respective useful life.
Capital Expenditure (Capex) and Ops Cash-Flow Margin
DiGi has invested RM741 million (2012: RM700 million) in
Capex, amounting to 11% of revenue, mainly on modernising
its network infrastructure and IT platforms.
The encouraging growth on top line revenue and EBITDA
resulted in improved Ops Cash-Flow to RM2,302 million (2012:
RM2,229 million), with a margin of 34%.
COST AND EBITDA %
Opex
COGS
EBITDA
Margin
30.2%
27.6%
25.5%
24.9%
2009 2010 2011 2012
2013
44%
46%
46%
45%
43%
23.8%
26.0%
26.4%
28.8%
30.3%
33.1%
PBT, NET PROFIT AND D&A (RM MIL)
2009
1,366
1,000
1,597
1,178
1,560
1,254
1,591
1,206
2,140
1,706
2010 2011 2012
2013
731
773
1,167
1,330
878
CAPEX (RM MIL) AND OPS
CASH-FLOW MARGIN (%)
2009
718
720
610
700
741
2010 2011 2012
2013
29%
31%
36%
35%
34%
PBT
Net
Profit
D&A
Capex
Ops
Cash-Flow
Margin
DiGi.COM BERHAD (425190-X)
ANNUAL REPORT 2013
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