‘Modest’ growth in revenue and EBTIDA for Axiata in 1Q20

21 May 2020

Malaysia-based Axiata has published its financial results for the first quarter of 2020, reporting ‘modest growth in revenue and EBITDA’. For the three-month period under review, Axiata said that ‘despite the increasingly challenging operating environment and early consequences of the damaging COVID-19 fallout’, group revenue had increased by 1.5% year-on-year to MYR6.04 billion, on a reported basis, up from MYR5.95 billion in 1Q19. It said underlying performance had also ‘held up’ in 1Q20, with revenues (excluding device sales) increasing to MYR5.89 billion (1Q19: MYR5.76 billion), with growth attributable to increased contributions from its operating companies (OpCos), notably XL in Indonesia and Robi in Bangladesh, offset by declines at its domestic unit Celcom and Ncell in Nepal.

Group EBITDA, meanwhile, increased by 3.4% to MYR2.50 billion in 1Q20, due to improved operational performance from all OpCos except Ncell and Axiata Digital (AD), while the company said that free cash flow increased 25.6% to MYR1.23 billion, lifted by EBITDA growth and lower CAPEX. However, despite what it called ‘better toplines’, Axiata reported consolidated net income of MYR398 million, notably lower than the MYR800 million reported for 1Q19, impacted by foreign exchange losses arising from the strengthening of the US dollar against local currencies and one-offs, especially Celcom’s MYR76.9 million employee restructuring programme (ERP). Group profit after tax and minority interests (PATAMI), which was ‘further impacted by lower one-off gains’, totalled MYR188 million in 1Q20, representing a more than 74% decline from MYR725 million in the year-ago period.

Although Axiata said it had seen ‘limited impact’ on its 1Q20 financial results from the COVID-19 pandemic, the company noted that it is continuing to monitor the ongoing financial and operational impact to its businesses across the region. However, it did confirm that, ‘given the uncertainty surrounding the depth and duration of this pandemic and the difficulty in predicting the pace of recovery at this point’, it was opting to withdraw its guidance on 2020 headline KPIs; these had previously forecast revenue growth of between 3.5% and 4.5% and EBITDA growth of 4.0%-5.5%

Malaysia, Axiata