Axiata Group will use proceeds from the Sukuk issuance for general corporate purposes
KUALA LUMPUR: Axiata Group Bhd
has shot back into the black after posting a net profit of RM239mil in the first quarter ended March 31, 2017, a turnaround from the net loss of RM309mil in the preceding quarter.
The telco said on Thursday that compared with a year ago, its net profit fell 35% to RM239mil from RM368.25mil.
The factors were mainly due to higher depreciation and amortisation charges coupled with higher finance costs and share of losses from associates.
Group revenue grew 17.4% to RM5.88bil in the first quarter from RM5bil previously, on the back of higher revenue contribution from Nepal (acquired in April 2016) and Bangladesh (merged in November 2016).
Earnings per share for the quarter stood at 2.70 sen compared with 4.20 sen previously.
Operating costs increased by 18.9% to RM3.72bil in the first quarter from RM3.13bil a year ago, also driven by Bangladesh and Nepal, in line with higher revenue recorded.
As a result, group’s earnings before interest, tax, depreciation and amortisation (Ebitda) increased by 14.9% quarter-on-quarter, with its margin at 36.6%, a marginal decrease of 0.8 percentage points.
“Despite higher Ebitda, group reported higher depreciation and amortisation charges coupled with higher finance costs and share of losses from associates, hence resulting in a lower profit after tax (PAT) for the quarter.
“PAT in the period decreased by 34.7% which resulted in a lower profit of RM262mil,” Axiata said in the notes accompanying its financial results.
Malaysia’s operations gross revenue decreased by 3.4% in 1Q17 mainly due to a drop in service revenue, primarily as a result of a decline in revenue contribution from value added services revenue, SMS revenue and voice revenue by 43.9%, 40.3% and 14.7% respectively.
Revenue decline was cushioned by growth of data business which saw an increase of 27.7%. Data revenue accounts for 40.4% of total revenue.
Axiata said Ebitda in the period fell 14% with a margin of 33% quarter-on-quarter, a decline of 4.1 percentage points.
PAT fell 34% to RM194.5mil, mainly due to lower Ebitda and higher share of losses from associates combined with higher depreciation and amortisation charges.
Axiata said the group successfully pared RM1.6bil loans including its US dollar exposed debts by US$213mil.
In addition, improvements in Ebitda further led to gross debt/Ebitda to fall below its debt covenant of 2.5 times, reducing from 2.64 times in the preceding quarter to 2.40 times in the current quarter.
Its cash balance also grew to RM6.7bil from RM5.3bil.
Axiata said further building on its 2016 maiden equity private placement exercise with final deal closing at US$700mil, a US$100mil upsize, edoctco welcomed pension fund, Kumpulan Wang Persaraan (Diperbadankan) (KWAP), as its third investor in April 2017.
edotco continues to grow organically with its strong focus on innovation and sustainable solutions, recently implementing the first bamboo tower designed in Bangladesh.
edotco now operates and manages approximately 25,800 towers across its footprint, making it the 12th largest tower company globally.
“In its strategic investments toward becoming a digital champion, Axiata Digital continued to strategically grow its portfolio of digital assets with further service launches and partnerships, having invested in 29 digital companies involved in mobile money, e-commerce, media and advertising; and other technology enablers.
“The group’s associates and joint ventures registered a negative contribution of RM31mil for the quarter, largely due to Idea in India,” it said.
“The first quarter performance has shown some encouraging signs and saw the group pare RM1.6bil of loans including its US dollar exposed debts to strengthen its balance sheet,” chairman Tan Sri Azman Mokhtar.
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