Despite continued improvements at most of its operating companies across Asia, Malaysia-based Axiata Group posted a net loss for the first quarter of the year due to the strength of its domestic currency and continued pain at its mobile unit in India.
The operator, with mobile operations in eight countries, reported a net loss of MYR147 million ($37 million) in Q1 compared with a MYR239 million profit in Q1 2017, which it attributed to a higher loss from its 18.1 per cent stake in India-based operator Idea Cellular of MYR124.3 million amid a “devastating price war” in the country.
Group revenue fell 2.3 per cent year-on-year to MYR5.75 billion.
Jamaludin Ibrahim, Axiata Group president and CEO (pictured), said an average 12 per cent increase in the strength of the ringgit against the currencies in its operating markets was another factor in the company’s Q1 performance: “Excluding those factors, the overall underlying performance was good. All op-cos’ performed better than industry in their respective markets.”
He said the group gained significant revenue market share in Malaysia, Indonesia, Sri Lanka and Bangladesh, noting “we see quarter-on-quarter improvements in key performance drivers.”
“While the Indonesian market’s dynamics and structural changes have impacted the entire industry, we believe it will lead to a healthier market environment ahead,” the CEO added.
The company said a group wide cost optimisation programme was on track to deliver the targeted MYR1.3 billion of savings in 2018.
Its full-year guidance for 2018 forecasts revenue and EBITDA to be flat, as it faces headwinds including “regulatory matters in Sri Lanka, Malaysia and Bangladesh as well as currency fluctuations as challenges for the year”.
Ibrahim added delays in a merger of Idea and Vodafone India will further impact Axiata, though Vodafone Group CEO Vittorio Colao last week expressed confidence it would close in June.
Celcom’s revenue increased 2.3 per cent year-on-year to MYR1.64 billion, with prepaid and data revenue up: the latter accounted for 47 per cent of total revenue (41 per cent in Q1 2017).
Indonesia-based XL Axiata grew revenue 4.3 per cent to IDR5.5 trillion ($286 million), with data revenue growing 31 per cent and comprising 63 per cent of total revenue (50 per cent).
Revenue from Sri Lankan business Dialog increased 28.5 per cent to LKR26 billion ($164.5 million). Robi in Bangladesh posted a 5.2 per cent revenue gain to BDT16.3 billion ($193.8 million), and Smart in Cambodia reported a stable performance despite price pressures and regulatory constraints.
Ncell in Nepal increased revenue 3.7 per cent to MYR576 million. Data revenue grew 34.5 per cent and accounted for 22 per cent of total revenue.