Axiata profit in latest quarter
Filed Under (Business News) by Webmaster on 25-02-2010
Tagged Under : Axiata
Axiata Group Bhd posted vastly improved quarterly results with net profit for the three months ended Dec 31 hitting RM558.3mil compared with a net loss of RM515.2mil in the previous corresponding period.
“The higher profit was driven mainly by improved contribution from Celcom group, XL Group, Axiata (Bangladesh) Ltd (AxB) and Dialog Group,” Axiata said in the notes accompanying its statement.
It added that the better performance from its associate and joint venture companies and favourable pre-tax foreign exchange gain also contributed to the higher net profit in the fourth quarter.
In a filing with Bursa Malaysia yesterday, Axiata said its pre-tax profit surged to RM827.7mil from a pre-tax loss of RM668.4mil and earnings per share rose to 7 sen from a loss per share of 9 sen before. Revenue for the period jumped 52.7% to RM3.7bil from RM2.41bil a year ago.
For the year ended Dec 31 (FY09), its net profit swelled 232% to RM1.65bil from RM497.9mil previously, on the back of relentless profit and cost management.
Revenue was RM13.1bil, up 15.5% from RM11.35bil in FY08. The increase in revenue was due to higher contribution from XL Group and AxB. However, intense competition and heavy price cuts in Cambodia continued to impact revenue growth in Telekom Malaysia International (Cambodia) Co Ltd.
According to analysts, Axiata’s results were above expectations. Bloomberg analyst consensus showed net profit at RM1.3bil and revenue at RM12.7bil for FY09. The telco’s net profit exceeded the average forecast of RM1.35bil by analysts polled by Thomson Reuters.
An analyst said Axiata’s balance sheet improved significantly and the group also beat its own internal headline key performance indicators for 2009 from stronger operational execution.
“The results were within ours and consensus expectations. Axiata continued to show quarter-on-quarter improvements especially from XL; Celcom and Bangladesh showed surprisingly strong results as well.
“Going forward, I think 2010 would be another good year with XL as the key earnings growth driver for the group, while Celcom would continue to be the cash cow,” a bank-backed analyst said.
Axiata turned free cash flow positive for the first time, up 265% to RM2.1bil. Its balance sheet was also significantly strengthened during the year, with gross debt to earnings before interest, tax, depreciation and amortisation (ebitda) ratio now at 2.4 times from 4.6 times, below the original target of three times.
The group’s total subscriber base expanded to 120 million, up 34% from a year ago.
At its results briefing yesterday, president and group chief executive officer Datuk Seri Jamaludin Ibrahim said the 18 months of hard work with right strategies and clockwork execution since its demerger from Telekom Malaysia Bhd in 2008 were paying off as reflected in its strong set of results. He said its three operational companies performed very well with Celcom and XL doing better than most competitors.
The group’s ebitda grew 18% to RM5.2bil, while margin increased by one percentage point to 39.3% year-on-year, due to exceptional performance in XL and AxB, where margin improved by three and five percentage points respectively.
“It’s (the results) like a fairy tale for us. However, if we were to have any fairy tale ending, the happy ever after, we must continue to strive further,” Jamaludin said, adding that FY09 had been a “watershed year” for the group.
“We must build a foundation and we did that last year. This year, we’ll harness on this foundation.” he said.
Moving forward, Axiata would be maintaining its tight focus on capital discipline to sustain its strong performance.
Jamaludin said the group was expecting “good growth” on the back of improved macro economic conditions. However, he said the competitive environment in some countries would also be heating up.
Axiata may spend between RM4bil and RM4.5bil on capital expenditure this year mainly for infrastructure, Jamaludin said, adding that the group was still finalising its budget for the year.
To a question, he said the group was not planning a final dividend for FY09 as it wanted to retain the funds for growth. Jamaludin said Axiata planned to expand its overseas operations and infrastructure for mobile broadband services.
He said the group had no acquisition plans for now and would focus on organic growth. “We did look at some opportunities but they did not materialise.” On plans to dispose of non-core assets, group chief financial officer Datuk Yusof Annuar Yaacob said the disposal of some of these assets would be finalised by the first quarter of this year.
