Axiata Group Bhd reported a wider net loss of RM576.21 million for the second quarter ending on June 30, 2023 (2Q23), compared to a loss of RM106.38 million in the same period the previous year.
The company attributed the negative results to factors such as increased depreciation and amortisation, impairment of assets in Nepal’s mobile operations, write-off of RM396.1 million in capital gains tax-related receivables due to an unfavourable outcome in the Bilateral Investment Treaty (BIT) Arbitration proceedings in June 2023, and higher finance costs.
However, these impacts were partially offset by higher revenues, reduced foreign exchange losses, profits from associates (mainly from CelcomDigi Bhd), and lower taxes.
Quarterly revenue for Axiata rose by 15.33% to RM5.99 billion, compared to RM5.2 billion in the previous year’s corresponding quarter.
The growth was primarily driven by all operating companies except for mobile operations in Nepal and the digital business.
Consequently, the group’s loss per share increased to 6.30 sen from 1.20 sen in 2Q22.
In the first half of 2023 (1H23), Axiata recorded a larger net loss of RM502.36 million, up from RM149.35 million in the same period of the previous year.
However, revenue increased to RM11.37 billion from RM10.18 billion previously.
During 1H23, the group achieved an adjusted operating free cashflow of RM601 million, and its cash balance remained strong at RM6.3 billion, supporting the company’s future endeavors.
Axiata declared a first interim dividend of 5 sen per ordinary share as part of its commitment to reaching a dividend target of 10 sen per share for 2023.
Its CEO and MD Vivek Sood, noted the improved competitive landscape, the resilience of operating companies in a challenging macroeconomic environment, and the focus on growth and cost optimisation that contributed to strong revenue and stable margins in 1H23.
He pointed out that generating cash, improving the balance sheet, and strategic capital expenditure for growth opportunities were priorities for the first half of the year and would continue to be so for the remainder of the year.
Vivek Sood also addressed the challenges faced by the company, including lower contributions from CelcomDigi and non-cash impairment and tax losses from Ncell.
He expressed confidence in the sustainability of growth, strong operating performance, and cash generation, which position the company well against these temporary setbacks.
He stated the expectation that the group would meet its key performance indicators and dividend goals for the year.
Its chairman Tan Sri Shahril Ridza Ridzuan noted that Axiata is on a path to extend its market leadership beyond the double-digit revenue growth observed in the first half of the year.
He reaffirmed the board’s support for strategic partnerships and synergistic integration resulting from the group’s strategic initiatives, underscoring Axiata’s winning culture and commitment to long-term business sustainability. –TMR