Axiata group chief executive officer and managing director Vivek Sood.
PETALING JAYA: Axiata Group Bhd
’s market consolidation efforts across Asia are starting to pay off, with “frontier markets” – Bangladesh, Sri Lanka and Cambodia – delivering double-digit earnings growth and higher average revenue per user (Arpu), even as losses at PT Link Net Tbk and Boost Holdings Bhd remain a drag.
Group chief executive officer and managing director Vivek Sood said Arpu in these markets has risen nearly 10% year-on-year, supported by improved market discipline following consolidation into three-player markets.
He added that earnings before interest and tax (Ebit) recorded double-digit growth across operating companies within these markets in the first half ended June 30, 2025 (1H25), aided by tighter cost and capital expenditure (capex) management.
“For the first time, we have seen RM1bil in dividends coming from our operating companies,” Sood said at Axiata’s virtual financial results briefing yesterday.
In Sri Lanka, he said Dialog Axiata’s merger with Airtel was well executed, with information technology and network integration completed within 100 days, and has already delivered synergies with a 50% year-on-year improvement in Ebit.
Similarly, the XL Axiata–Smartfren merger in Indonesia and Celcom-Digi integration in Malaysia are progressing well, with full benefits expected by 2027.
For XLSmart, about 58% of targeted synergies worth US$100mil to US$200mil this year have already been realised.
On the flip side, Axiata’s Link Net and Boost remained loss-making.
Link Net posted a wider loss of RM184.7mil compared with RM83.8mil a year ago, as it transitions into a wholesale fibre operator. Sood said the company is still adjusting to its new model after moving its retail business to XLSmart last year, which has led to slower growth.
“We now have five to six Internet service providers signed up and are rolling out about 100,000 new home passes every month. But there is a lag effect in wholesale fibre – revenues only come once those passes reach at least 15% to 20% penetration. So you will see some stress in the short to medium term,” he said.
Boost also reported a deeper loss of RM115.3mil versus RM109.1mil previously.
Sood said the wallet arm is expected to break even by early 2026, while Boost Bank remains a longer-term play.
“Boost Bank will take three to five years to turn profitable, but we are already seeing encouraging growth – the loan book has expanded from RM17mil in January to nearly RM200mil now,” he noted.
On a brighter note, Axiata booked RM170.8mil in contributions from its associates CelcomDigi Bhd and XLSmart.
On capex, Sood said spending has eased as most of Axiata’s operating companies have reached a more mature stage.
Group capex for the first half stood at RM644mil, nearly half of RM1.25bil a year ago.
Looking ahead, Sood reaffirmed the group’s strategy of classifying assets into long-term strategic businesses – primarily connectivity and convergence – and medium-term monetisable assets such as infrastructure and digital businesses.
“The focus is around capital allocation, operational excellence, market repair and using adjacencies around connectivity businesses.
“Over time, Axiata would be focusing on getting the best cash flows and profitability out of connectivity, which should then translate into good earnings for our shareholders,” he said.
On infrastructure and digital business, he said efforts are on value enhancement, with monetisation to be considered “when there is good interest and the right kind of investor”.
He cited the recent exit from Myanmar as part of this “value illumination” strategy.
“We are working well in terms of creating value of these assets and looking at plans for monetisation.
“As and when those things get crystallised, we will let the markets be aware,” Sood said.
He added that Axiata remains on track to meet its headline Ebit growth guidance of a high single-digit for 2025.
For the quarter ended June 30, 2025, net profit doubled to RM270.8mil from RM134.9mil a year earlier, while revenue fell 10.6% to RM2.97bil from RM3.32bil.
For 1H25, net profit rose 121% to RM430.7mil from RM194.9mil, although revenue fell 10% to RM5.86bil.
On a constant currency basis, revenue saw a marginal 0.9% decline, as the ringgit strengthened against all operating currencies.
Ebitda dipped 8.5% on a reported basis, but rose 2.3% on constant currency due to improved cost efficiencies, while normalised Ebit improved 8.4%.
The group also strengthened its balance sheet, cutting debt by RM5.1bil in the first half, partly due to the deconsolidation of XL, and lowering its net debt-to-Ebitda ratio to 2.76 times.
Axiata declared a first interim dividend of five sen per share during the quarter.
