CelcomDigi Berhad (CDB) is expected to post stronger second-quarter 2026 earnings, supported by improving service revenue, higher operating margins and continued progress in delivering merger-related cost synergies, according to CIMB Securities.
The research house forecasts CelcomDigi’s core net profit (CNP) to grow between 6% and 8% quarter-on-quarter and 1% to 3% year-on-year for the quarter ending June 2026. The company is scheduled to announce its financial results on Aug 14.
CIMB expects service revenue to increase 1% to 2% quarter-on-quarter and 1% to 2% year-on-year, driven by stronger consumer prepaid subscriber additions following revised prepaid offerings introduced in late January and stable to slightly higher average revenue per user (ARPU).
The brokerage also expects CelcomDigi’s EBITDA margin to improve by up to one percentage point from 52.4% recorded in the first quarter, supported by lower provisions for doubtful debts and ongoing cost optimisation initiatives.
The company is targeting RM465 million in cost savings for FY2026, although CIMB noted that a significant portion of the savings is expected to be realised in the second half of the year and will be partly offset by higher 5G and fibre network access costs.
Based on its projections, first-half core net profit is expected to account for 48% to 50% of CIMB’s full-year earnings forecast, broadly in line with expectations.
DNB impact likely delayed
CIMB has also revised its assumptions regarding the transfer of equity in Digital Nasional Berhad (DNB), now expecting the Ministry of Finance to complete the share transfer by the end of the third quarter or early fourth quarter of 2026.
As a result, the brokerage now assumes CelcomDigi will only account for three months of DNB’s losses in FY2026 instead of six months previously, prompting a 3% increase in its FY2026 earnings forecast.
The research house continues to estimate DNB will record net losses of RM700 million in FY2026, RM500 million in FY2027, and RM300 million in FY2028.
Earnings growth expected through 2028
CIMB now expects CelcomDigi’s core net profit to grow 8% year-on-year in FY2026, supported by approximately 3% service revenue growth and further improvement in EBITDA margins.
For FY2027, earnings are projected to rise another 3%, underpinned by continued revenue growth, greater merger-related cost synergies and lower integration expenses following the completion of IT system consolidation by the end of FY2026 or early FY2027.
Excluding the impact of DNB’s losses, CIMB estimates FY2027 earnings would grow by around 9% year-on-year.
The brokerage also expects CelcomDigi’s capital expenditure to decline significantly over the next two years as network integration progresses and DNB assumes responsibility for 5G infrastructure investments.
Capital expenditure is forecast to fall 22% in FY2027, followed by a further 21% decline in FY2028 as 4G network investments taper.
Looking further ahead, CIMB projects CelcomDigi’s core net profit to increase by 12% in FY2028, driven by expanding merger synergies, particularly from the expiry of duplicate tower leases, as well as a reduction in its share of DNB’s losses.
