Q2 2020 Maxis Bhd Earnings Call
Kuala Lumpur Jul 25, 2020 (Thomson StreetEvents) -- Edited Transcript of Maxis Bhd earnings conference call or presentation Thursday, July 23, 2020 at 10:59:00am GMT
TEXT version of Transcript
* Gokhan Ogut
Maxis Berhad - CEO & Acting CMO
Gokhan Ogut, Maxis Berhad - CEO & Acting CMO 
Hello. I'm Gokhan. I'm pleased to share with you our financial performance and highlights for quarter 2 2020. It's been an extraordinary quarter as the nation and the world were faced with the global pandemic of COVID-19. This prompted the moment control order and impacted life and business, working from home, social distancing, prioritizing health, safety and well-being of our employees, customers and members of the public and ensuring the health of our network.
Nonetheless, we were agile in responding to the situations with our well-planned BCP measures in place. With our push to increase the usage of our digital channels, we also saw increased demand for our services, particularly around connectivity, converged solutions and digital care. All of this, together with our commitment to protect the health of our employees, network and systems enabled us to perform well in a unique and challenging time.
One of our key priorities in the early parts of quarter 2 was our focus on supporting the government, community and customers who depend on our services to stay connected, informed and productive. We rolled out several key initiatives, which were important to ease the burden of our customers and the community at large. Students of our flagship community program E-class were also able to continue learning at home via mobile with free data access to E-class portal. In fact, these initiatives continue to this date. Meanwhile, to inspire positivity across the nation, we launched our (inaudible) campaign, which saw an overwhelming response. Collaborating with business leaders, we co-created content for SMEs on how to stay in business during these difficult times.
While our teams volunteered to be advisers to SMEs on topics such as e-commerce, digital marketing and upskilling. We then launched an original song and music video in collaboration with top local artists to inspire Malaysians to stay strong and positive.
As we eased into recovery phase of the MCO, we began to gradually shift our focus back on rolling out new and relevant propositions. Our new hub in prepaid unlimited is an important used targeted proposition that provides greater value for this growing segment. It was timely as our customers are consuming the Internet at unprecedented rates. We are seeing good traction for this offer, which has in fact, contributed to the increase of our prepaid base for the quarter.
For our postpaid customers. We enriched our Maxis postpaid plan with up to 100 gigabytes of high-speed data as well as unlimited calls and SMS to all networks. We have an ambitious plan for SMEs who are a major contributor to the nation's economy, not just to increase their digital adoption, but to strengthen their position within the digital ecosystem. Together with our partner, we launched SME-in-a-box as one-stop solution, offering access to financing and digital solutions.
Recently, Maxis was also identified as a technology solutions provider by the Malaysian Digital Economy Corporation or the SME digitalization grant on their budgets 2020. What this means is that we can deliver a comprehensive range of digital and connectivity solutions that SMEs can leverage quickly and easily to get their businesses run.
We continue to drive cloud adoption for enterprises while amplifying its incredible benefits. In quarter 2, we strengthened our presence in the enterprise market by expanding our cloud solutions. With the equity hire of a cloud solutions company, we are able to build talent capacity in key areas to support and stimulate growth for businesses. Meanwhile, we will continue to leverage our global partnerships with the likes of Microsoft, AWS and Cisco to provide comprehensive best-in-class solutions to our customers.
As always, our network has been key to our strong performance, and we continue to invest significantly to connect Malaysians with the best fixed and mobile networks.
Our network BCP architecture also helped navigate the challenging demands of MCO. To ensure that, our networks remained healthy to cater to the surge in data consumption. We are proud to have maintained our position as the network leader amongst all service providers. It is a testament to our investments and commitments to our customers.
On fiber, we continue to see positive take up despite the challenges of MCO, and we're ready to support our customers with alternative mobile broadband solutions during this period. We continue to support the government's NFCP ambition by driving higher broadband adoption nationwide. 5G continues to be high on our agenda, and we remain focused on readiness and used case development. We have been engaging with the industry on trials, brand sharing with telco partners and will feature even more used cases in the coming months. We are ready to deploy 5G and are committed to provide the best 5G innovation to Malaysia as soon as the spectrum is made available.
Here is a summary of our financial performance year-on-year. Our underlying service revenue was stable in this difficult quarter, driven by strong growth in postpaid and the fiber businesses. We saw strong results on postpaid, a segment which we continue to lead. Prepaid revenue was lower due to the much needed re-data initiatives provided during the as well as the constraints on physical retail channels and field sales teams. Our normalized EBITDA is resilient and healthy. With EBITDA margins remaining at high levels.
Consequently, our normalized PAT for the quarter was lower. On the positive side, though, our operating free cash flow remained at a high level, attributed to our productivity and working capital programs delivering good results. We are optimistic, but continue to be prudent in all our undertakings, protect our core business, prepare ourselves for recovery and keep our focus on our converged solutions growth strategy. Thank you.