Axiata’s 3Q net profit drops 9.4% to RM120m due to absence of M1’s contribution

Its quarterly revenue, however, increased 3.5% YoY to RM6.2b from RM6b in 3Q18


AXIATA Group Bhd saw its net profit in the third quarter ended Sept 30, 2019 (3Q19), fell 9.37% year on- year (YoY), to RM119.7 million from RM132.07 million a year ago due to the absence of M1 Ltd’s contribution as a result of its disposal and higher taxes in Bangladesh.

The telecommunication company’s earnings per share for the three months were lower at 1.3 sen, compared to 1.5 sen a year ago.

Its quarterly revenue, however, increased 3.5% YoY to RM6.21 billion from RM6 billion in 3Q18 attributable to better performance by most of its operating companies.

The group’s Ebitda increased 29% to RM2.8 billion in 3Q19 driven by revenue growth, as well as its cost excellence initiatives which resulted in RM816 million savings.

“The strong set of financial results recorded by Axiata this quarter is a testimony to the group’s disciplined and rigorous execution of operational and cost excellence initiatives aimed at steadying the group and mitigating our geography’s complex, uncertain and competitive business and regulatory environment,” Axiata chairman Tan Sri Ghazzali Sheikh Abdul Khalid said in a statement yesterday.

For the first nine months in 2019, Axiata posted a net profit of RM1.03 billion against a net loss of RM3.37 billion in the previous year, due to better underlying performance across most operating companies, foreign-exchange gain, discontinuation of losses related to its investment in India, gain on disposal of non-strategic investments and disposal of investment rights in India.

The group’s revenue in the period increased 3.97% YoY to RM18.32 billion from RM17.62 billion in 9M18 as a result of strong data revenue growth.

Axiata president and group CEO Tan Sri Jamaludin Ibrahim said the group’s performance shows it has successfully “shifted gears” in the last nine months to take the lead among the peers in the region.

“I am particularly proud of our operating companies emerged as top in their respective markets in meeting most of the metrics in Ebitda, profit and cash for this quarter.”

Axiata said Celcom’s free cashflow (FCF) expanded 15.3% to RM674 million in 9M19 supported by Ebitda growth of 3.9%.

Its combined postpaid and prepaid revenue rose 0.6% year-todate (YTD), while mobile service revenue dropped 4.1% YTD impacted by the decline in wholesale revenue.

Celcom’s blended average revenue per user improved by RM1 to RM52 in 3Q19 compared to the preceding quarter.

Meanwhile, PT XL Axiata Tbk’s FCF surged 50.9% to 1.8 trillion rupiah (RM530 milllion) YTD on the back of cost efficiencies fueling 19.4% jump in Ebitda.

XL’s data subscribers grew to capture 88% of 55.5 million total subscribers from 53.9 million in 3Q18.

Dialog Axiata plc’s FCF grew 39.5% to 19.2 billion Sri Lankan rupees buoyed by higher Ebitda and calibrated network rollout.

Axiata’s e-wallet Boost, currently has 4.7 million users and 112,000 merchants as of end 3Q19, where its gross transaction value has increased 13.2 times.

“We have been working hard to step up on operational excellence across the group and maintain the gruelling momentum since unveiling our 2019-2020 plans. Thus far, our main concern in most of our markets is in regulatory risks.

“Given the current trajectory and barring unforeseen circumstances, we are likely to exceed targeted FY19 headline key performance indexes for Ebitda growth of 5%-8% and return on invested capital of 5.2%-5.6%. Revenue growth at 3% to 4% is likely to be below,” Jamaludin said.