Axiata 1Q net profit down after stake sale in year-ago period

1 Jun 2011

Malaysian telecoms group Axiata has revealed a 40.5% drop in net profit for the three months ended 31 March 2011 compared to the same period a year earlier. In its first fiscal quarter of 2011 Axiata posted net income of MYR548.37 million (USD180 million), down from MYR921.46 million, although the drop was largely attributed to the sale of the group’s shares in Indonesian unit PT XL Axiata in the same period last year; the sale netted the company MYR307.5 million. Excluding the impact on the sale, Axiata said that net profit would have increased by 19% as a result of ‘increased profitability from cost management and operational improvements’ at Malaysia’s Celcom, PT XL and Sri Lanka-based Dialog. First quarter turnover meanwhile rose by 3.3% year-on-year to MYR3.94 billion, an increase that Axiata said stemmed from continued improvements at its mobile subsidiaries, while earnings before interest, tax, depreciation and amortisation (EBITDA) were MYR1.73 billion, up 3% against 1Q10. Revenues at Celcom rose by 1.9% y-o-y to MYR1.74 billion, driven by increased broadband subscriber numbers, while PT XL reported a revenue increase of 8.7%, again spurred by higher customer take-up.

In operational terms, at the end of March 2011 Axiata Group reported a total subscriber base of 168.3 million, the lion’s share of which – 89.5 million – were accounted for by Indian wireless network operator Idea Cellular, in which the Malaysian company holds an approximate 19% stake. XL meanwhile reported a subscriber base of 39.27 million, up from 32.56 million a year earlier, but down from 40.351 million in the previous quarter as a result of ‘competitor’s aggressive offers’ in the period under review. Bangladesh-based Robi had some 18.32 million customers at end-March 2011, while Celcom’s subscriber base stood at 11.32 million up 37% and 9% respectively.

Commenting on the results, Axiata chairman Tan Sri Azman Mokhtar, was quoted in local press reports as saying: ‘It has been a tough start to the year with competition intensifying amidst a difficult operating landscape … This, coupled with a maturing market in Malaysia and increased competition across the group, led to a challenging first quarter this year. It was somewhat mitigated by strong data growth of 20% year-on-year.’

Malaysia, Axiata, Celcom Axiata, Dialog Axiata, Robi Axiata, XL Axiata