Axiata Fortunes Improve As Turnaround Momentum Heightens

Malaysia-based Axiata returned to profit in the second quarter as it registered growth across most of its business units, with particularly strong performances from XL in Indonesia and Robi in Bangladesh.

The regional operator posted a net profit of MYR204 million (US$48.4 million), reversing a loss of MYR3.36 billion a year ago after booking a MYR3.4 billion provision on its mobile unit in India as part of its merger with Vodafone India.

Operating revenue in the quarter increased to 4.9 per cent year-on-year to MYR6.15 billion. The operator said the gain was a result of better performance from all operating companies apart from Celcom in Malaysia and Ncell in Nepal.

Axiata president and CEO, Jamaludin Ibrahim said in a statement: “Following our portfolio rationalisation of non-core assets over the last 12 months and our Shifting Gear focus towards profitability and cash, we are pleased to deliver a very good set of tangible results fueled by cost excellence and strong operational performance across the group.”

He noted five out of six operating companies maintained or gained revenue market share and delivered the highest profit growth in their respective markets, adding: “In particular, it is good to see XL and Robi deliver strong profit growth”.

Regional units

XL experienced 16.2 per cent revenue growth to MYR1.82 billion on the back of strong data gains, while EBITDA grew 54.1 per cent to MYR941 million.

Celcom’s revenue dropped 8.3 per cent year-on-year in the quarter to MYR1.66 billion due to lower device sales, coupled with cuts in domestic interconnect and domestic roaming rates. EBITDA, however, grew 43.5 per cent to MYR710 million and it had a strong EBITDA margin of 42.7 per cent.

Ibrahim said he is encouraged by the steady turnaround it is seeing at Celcom, which enabled the company to perform better against its peers in terms of profitability.

Ncell in Nepal suffered a 6.1 per cent decline in revenue to MYR520 million as most segments were impacted by a hike in the country’s telecoms services charge in July 2018.

Revenue at Robi rose 17.7 per cent to MYR914.4 million due to strong growth in all segments it said, but registered a net loss of MYR15.8 million for the quarter as a change in tax law effective 1 January 2018 resulted in a higher tax liability.

Dialog in Sri Lanka posted 2.9 per cent revenue growth to MYR686 million, but profitability fell 3.9 per cent mainly due to higher network costs, while Cambodia-based Smart’s revenue grew 15.1 per cent to MYR326.4 million, underpinned by robust data growth. Its profitability, however, was offset by higher depreciation and amortisation, and tax expenses.

While Axiata’s tower unit edotco recorded a 16.9 per cent year-on-year increase in revenue to MYR436 million in Q2, its profitability dropped 34.8 per cent due to forex losses and higher depreciation and amortisation.

Capex for the first six months of the year was MYR2.74 billion, down slightly from the same period in 2018. The 2019 budget is set at MYR6.8 billion.

For the full year, the company forecasts operating revenue to increase between 3 and 4 per cent and EBITDA to rise 5 to 8 per cent.-Mobile World Live 

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