Axiata swings to net loss in 1Q21 on unrealised forex losses

26 May 2022

Despite reporting that both revenue and EBITDA had grown ‘steadily’ in the first quarter of 2022, Malaysian telecoms group Axiata swung to a loss in the three-month period on the back of unrealised foreign exchange translation losses attributed to the weakened Sri Lankan rupee and Malaysian ringgit against the US dollar.

Axiata reported a total turnover of MYR6.470 billion (USD1.47 billion) in Q1 2022, up from MYR6.604 billion in the year-earlier period, while EBITDA totalled MYR2.898 billion, up 7.7% from MYR2.682 billion. According to Axiata, growth had come on the back of contribution from all of its ‘operating companies’ (‘OpCos’), except Nepal’s Ncell, and was achieved ‘despite bracing against external impacts such as headwinds in Sri Lanka and macroeconomic uncertainties stemming from the slowing of major economies’.

However, the group reported that profit after tax (PAT) and profit after tax and minority interest (PATAMI) had declined significantly due to unrealised forex losses ‘primarily at the Dialog and Axiata levels’, while it also pointed to higher tax contributions due to the one-off Cukai Makmur (‘Prosperity Tax’) levied on it. As a result, the group reported a net loss of MYR43 million in 1Q22, having previously reported PATAMI of MYR76 million in the corresponding period a year earlier. More positively, Axiata highlighted that during the quarter under review it had achieved ‘cost excellence’ through capital expenditure (CAPEX) and operational expenditure savings of MYR163 million and MYR78 million, respectively. CAPEX in 1Q22 was reported at MYR938 million, with the biggest portion of that – MYR361 million – attributable to the group’s operations in Indonesia.

Commenting on the financial performance, Dato’ Izzaddin Idris, President & Group Chief Executive Officer of Axiata said: ‘On balance, given the challenging externalities, we landed the first quarter of 2022 on a steady footing. Backed by strong performance from Axiata’s OpCos which also benefited from the absence of the accelerated depreciation of 3G assets, we delivered stable revenue and EBITDA growth. Correspondingly, underlying PATAMI jumped by 70.7% as a result of higher EBITDA contribution across all OpCos except Ncell.’

Malaysia, Axiata