Axiata
KUALA LUMPUR: Axiata Group Bhd
's profit fell 75% to RM657mil in the financial year ended Dec 31, 2016, from the RM2.636bil a year ago as it was impacted by forex exchange losses on US dollar exposed debt for Ncell acquisition.
It said on Thursday the group was also impacted by lower contributions from Idea, mergers and acquisition costs in the Robi-Airtel merger and Ncell acquisition.
Other factors were the higher depreciation and amortisation (D&A) and accelerated depreciation for the 4G rollout, start-up investment losses and performance at some operating companies, including Celcom Axiata.
Axiata said externally, the Ringgit depreciation and volatility against the US Dollar resulted in the group recording a substantial pre-tax foreign exchange (forex) losses of RM685mil at profit after tax level mainly due to the US$ exposed debt incurred from the acquisition of Ncell.
“Aggressive competition in India with the entry of a disruptive new player, at an unheard off scale, resulted in considerably lower contribution from the group’s associate by RM304mil,” it said.
Axiata said its earnings for FY16 fell 80.2% to RM504.25mil from RM2.554bil due to losses in the fourth quarter while revenue was higher at RM21.56bil from RM19.88bil.
For the fourth quarter ended Dec 31, 2016, it posted losses of RM272.06mil compared with profit of RM515.24mil a year ago. Net losses were higher at RM309.50mil compared with earnings of RM467.23mil.
Its revenue rose to RM5.789bil from RM5.360bil. Loss per share was 3.5 sen compared with earnings per share of 5.30 sen.
Axiata president and group CEO Tan Sri Jamaludin Ibrahim said that Celcom Axiata did not perform as well.
On the dividend policy, he said Axiata had to be prudent due to changes in the industry and forex volatility.
It declared a dividend of three sen a share in contrast with the 12 sen a year ago. For FY16, the total dividend was eight sen compared with 20 sen.
Axiata said the board’s decision on 50% dividend payout ratio was two-fold.
The first was cautionary, prudent measure to ensure resilience against unpredictable forex and market volatility, and further spectrum costs in the next two years.
The second was investment for strategic long term benefits which included: a) increased capex investment where Axiata intends to be a clear number one player in 4G and data leadership in selected areas in all markets; b) market consolidation and edotco expansion.
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