KUALA LUMPUR, April 26 — Maxis Bhd is on track to achieve an annual service revenue of RM10 billion by 2023 from the current RM8 billion. Interim chief executive officer Gokhan Ogut said Maxis had started its five-year transformation journey that…
PETALING JAYA: Maxis Bhd’s net profit for the first quarter ended March 31, 2019 fell 22% to RM409 million from RM523 million a year ago attributable to the decline of wholesale revenue due to the termination of the network sharing agreement, continued investment in FibreNation and mobilisation of the enterprise business growth opportunities.
Revenue was flat at RM2.23 billion compared with RM2.24 billion in the previous year’s corresponding quarter.
Its board of directors has declared a first interim single-tier tax-exempt dividend of 5.0 sen per share.
Maxis said there are a few key items impacting the group in 2019, including the impact of changes to a major wholesale network sharing agreement in Q119 and Q219, dilution in fibre average revenue per user from the new competitive priced plans and the cost of customer migration initiative coupled with the increase in cost to serve; as well as the increase in cost of business from the Sales & Service Tax.
Its guidance for the financial year ending Dec 31, 2019 remains unchanged.
It expects service revenue and earnings before interest, tax, depreciation and amortisation to decline by low single digit and mid-single digit respectively; core network capital expenditure to be around RM1 billion plus capex supporting new growth opportunities in broadband and enterprise business (around RM1 billion over three years); and operating free cash flow (excluding upfront spectrum fee assignment) at a similar level to year 2018.
The group is implementing a significant change in strategic direction building on its strong mobile base to deliver its internal annual service revenue target in excess of RM10 billion by 2023.
PETALING JAYA: Syarikat Takaful Malaysia Bhd registered a net profit of RM96.4 million for the first quarter (Q1) ended March 31, 2019, a 37.8% jump from RM70 million in the same period last year.
The group attributed the improvement in profit to a higher Wakalah fee income arising from business growth in the family takaful.
Revenue for the quarter under review stood at RM918.2 million, 23% higher than the RM746.2 million registered in the same quarter a year ago.
Takaful Malaysia’s family takaful business generated a gross contribution of RM502.9 million in Q1’2019, a 55% jump from RM324 million in Q1’2018, underpinned by higher sales from credit related products.
Meanwhile, its general takaful business delivered a gross contribution of RM204.2 million in Q1’2019, an increase of 12% compared with RM182.4 million in Q1’2018. The growth was attributed primarily to its fire class.
Despite business sentiments remaining cautious in 2019, Takaful Malaysia expects the takaful industry to outperform the conventional insurers in view of the strong demand in the takaful products.
“Takaful Malaysia is poised to further expand its market share in 2019. To sustain its market leading position, the company will continue with its innovative strategies via the implementation of its digital strategy, introduction of online solutions, expansion of its distribution capabilities, strategic partnerships with leading Islamic banks and Brand awareness initiatives.”
To support business growth and customer centricity, the group will continue its digital strategy to build the full digital ecosystem and to expand the business focus beyond credit-related business to reach out to the wide retail customer base of major partner banks.
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KUALA LUMPUR, April 10 — Small businesses in Singapore grew less strongly than their counterparts in South-east Asia, despite growing at their strongest pace in three years in 2018 and outperforming other developed economies like Australia, Hong…
PETALING JAYA: Financing is not the main constraint to small and medium enterprises’ (SMEs) business growth, but factors associated with operating and business conditions, namely increasing competition, fluctuating demand, rising input costs as well as labour costs.
In its Financial Stability and Payment Systems Report, Bank Negara Malaysia (BNM) said according to a survey it conducted last year, difficulty in accessing sufficient financing was ranked low, second to last out of the nine constraints identified by SMEs.
Findings from the survey revealed that financing barriers faced by SMEs are mainly related to documentation, costs as well as business viability.
SMEs that experienced rejections of their financing applications cited insufficient documentation, cash flow to meet repayments and non-viable business plans as the main reasons for rejection.
About 46% of the respondents stated that the financing products offered by financial institutions did not meet their business needs due to high financing costs, insufficient financing amount and onerous documentation requirements.
The average financing rate that respondents were willing to pay was 3.88%, well below the average lending rates to SMEs of 6.18% at the time of the survey (Q2 2018).
The challenges raised by businesses in the survey point to opportunities for improvements in the on-boarding process of financial institutions (including documentation requirements) and financial management capabilities of SMEs to enhance their creditworthiness, it added.
A total of 1,529 SME businesses participated in the survey. The survey is part of the central bank’s ongoing efforts to promote continued access to financing for SMEs.
PETALING JAYA: RAM Ratings expects general takaful contributions to expand at a slower pace of 6-7% while family takaful new business growth is expected to decelerate to 7-9% this year.
The credit rating agency said general takaful contributions will see slower growth with the progressive impact of tariff liberalisation and moderating economic growth.
Family takaful new business growth, on the other hand, will be hit by weaker consumer sentiments and rising cost of living concerns.
“Despite near-term moderation, the long-term growth prospects for the industry remain anchored by Malaysia’s supportive demographics, low penetration rates and awareness initiatives targeted at the Muslim-majority mass market,” it said in a statement today.
RAM Ratings has a stable outlook on the Malaysian takaful industry for 2019.
Last year, general takaful contributions rose 8% to RM2.8 billion with all major business lines charting growth. Motor took the lead with a 13.4% growth, followed by medical and personal accident coverage with 7.3% growth, and fire plans with 1.4% growth.
RAM Ratings said the lack of significant catalysts for motor sales and property transactions may limit growth going forward.
“In the previous environment of fixed pricing, the unique ability of general takaful operators to offer cashback incentives to customers from takaful fund surpluses was a source of product differentiation.
“This competitive advantage has been curtailed with risk-based pricing, as all general insurers and takaful operators can now offer upfront reductions of premium or contributions for ‘favourable’ risks,” it noted.
Meanwhile, family takaful new business contributions grew 13.1% to RM4.9 billion last year, spurred by the growth of ordinary family products. However, the sector’s profitability was affected by soft investment conditions.
“An anticipated moderation in private consumption growth may tamper with near-term demand, but the recently announced mySalam national health protection scheme which provides takaful coverage to the B40 lower-income group may act as a catalyst for future purchases of individual protection plans. The family takaful penetration rate is currently low, at about 15%,” it said.
According to RAM Ratings, the takaful sector in Malaysia represents a small 17% of the combined insurance and takaful segment’s total premiums and contributions. Upcoming regulatory changes for the industry include enhancements to the existing Takaful Operational Framework.
For family takaful operators, revisions to investment-linked product guidelines will take effect in 2020. These revisions aim to ensure high standards of governance and better safeguards for consumers.
As at end-June 2018, the combined general and family takaful sector’s capital adequacy ratio stood at 227.5% compared with 213.7% as at end-December 2017, above the minimum regulatory requirement of 130%.
PETALING JAYA: Berjaya Food Bhd (BFood) saw a net profit of RM8.98 million for the third quarter ended Jan 31 compared with a net loss of RM10.85 million a year ago, mainly due to higher profit contributions from its Starbucks operations in tandem with the higher revenue achieved as well as improved performance from the Kenny Rogers Roasters (KRR) Malaysia’s operations in the current quarter, with the absence of loss arising from the disposal of the group’s KRR operations in Indonesia.
It registered a 9.8% increase in revenue to RM180.54 million from RM164.44 million in the previous year’s corresponding quarter, mainly underpinned by the same-store-sales growth recorded by Starbucks as well as additional Starbucks cafes operating in Malaysia in the current quarter under review.
BFood has recommended a third interim dividend of 1.0 sen dividend per share for the quarter under review, payable on April 26.
For the nine-month period, BFood’s net profit jumped over 73 times to RM22.26 million from RM304,000 in the previous year’s corresponding period, while revenue rose 6% to RM508.50 million from RM479.61 million.
“The renewed consumer confidence level coupled with the group’s expansion plans will fuel the group’s business growth. This augurs well for the group’s operations going forward,” BFood said.
KUALA LUMPUR, March 14 — RAM Rating Services Bhd (RAM Ratings) is maintaining a stable outlook on the local insurance industry for this year with general insurance premiums expected to stay stagnant in view of the progressive impact of tariff…