Axiata bullish over full-year earnings

Business Times

KUALA LUMPUR: Axiata Group Bhd remains bullish over meeting its performance targets this year despite posting lower profits in the second quarter.

Axiata’s net profit shrank 30.5 per cent to RM447.82 million in the second quarter ended June 30 2104 from RM644.77 million a year ago, due to the impact of PT Axis Telekom Indonesia-XL Axiata integration and foreign exchange losses.

Group president and chief executive officer Datuk Seri Jamaludin Ibrahim, however, expects the company’s full-year performance to match its key performance indicators (KPIs).

“Based on the performance so far, at constant currency and barring any external factors that could materially affect our performance in the second half of the year, we expect the group performance to be in line with the KPIs, albeit at a slightly lower revenue growth,” he said at a results briefing yesterday.

Axiata, one of the largest telecommunications companies in the region, announced a two per cent revenue increase in the second quarter to RM4.73 billion from RM4.63 billion a year ago.

Net profit for the first six months eased 10.8 per cent to RM1.12 billion from RM1.26 billion previously, while revenue rose 1.5 per cent to RM9.24 billion.

Meanwhile, Jamaludin is happy with the Axis-XL Axiata integration progress, saying it will pave the way for significant synergies for Axiata to increase its presence in Indonesia.

The acquisition costs of Axis were impacted by the decline of the rupiah but the bulk of the forex losses was unrealised.

“Currency volatility is still a concern but our business remains strong and we continue to execute strongly on our strategy to deliver long-term growth,” he said.

Data continued to be the main growth driver, up 27 per cent, and the penetration of smartphones has led to strong growth in data revenue in all markets.

Apart from Malaysia, Axiata has controlling interests in mobile operators in Indonesia, Sri Lanka, Bangladesh and Cambodia, with significant stakes in India and Singapore.

It also has a stake in non-mobile telecommunication operations in Pakistan.

The group recently integrated Hello and Smart in Cambodia and Suntel and Dialog in Sri Lanka.

During the second quarter, Dialog, Robi Axiata Ltd (Bangladesh) and Smart Axiata Co Ltd posted strong performance.

In terms of its revenue profile, Celcom contributed 42 per cent of the total, followed by XL (35 per cent), Robi (11 per cent), Dialog (nine per cent) and Smart (three per cent).

On its outlook over the next 12 months, Jamaludin said more opportunities than challenges await the mobile operator’s operations in the region because “the cake has only grown larger”.

He sees heightened competition in Bangladesh and India from the regulatory perspective, while more pressure will be felt in Malaysia and Indonesia because of the decline in SMS due to other options.

On reports that China Mobile Ltd is looking to buy a stake in Axiata, Jamaludin said no one has talked to him.

He also said that the listing of the group’s tower business would take place later.