Malaysia headquartered Axiata Group registered double-digit revenue growth in Q1, but net profit fell sharply due to a slow turnaround at its two largest regional subsidiaries.

Axiata cited higher depreciation, amortisation and finance costs, and a negative contribution from Idea Cellular in India for a 35 per cent year-on-year drop in net profit to MYR239 million ($55.6 million).

Revenue grew 17.4 per cent to MYR5.88 billion, driven by a 43 per cent rise in data revenue.

Jamaludin Ibrahim, president and CEO of Axiata Group, said: “Coming off a very challenging year, I am encouraged by the overall improved performance for the quarter. The turnaround at Celcom is progressing on track and showing some stabilisation. XL’s new strategy, after some challenges last year, is coming together well. However, at both companies, there are still lots more required.”

The company reduced its debt by MYR1.6 billion, including a cut in US dollar loans by $213 million.

Operating companies
Celcom’s revenue fell from MYR1.66 billion in Q1 2016 to MYR1.6 billion in the recent quarter. Post paid revenue was up 1.2 per cent on the back of higher ARPU, and data revenue increased 30 per cent year-on-year. However, the unit lost 300,000 subscribers during Q1 2017, leaving its total at end-March some 1.8 million lower than the same point of 2016.

Indonesia unit XL grew revenue 0.7 per cent year-on-year to MYR1.75 billion – its third consecutive quarter of service revenue growth – driven by an 8.9 per cent increase in data revenue. Blended ARPU dropped 15 per cent compared with Q1 2016 to IDR33,000 ($2.48). Smartphone penetration hit 65 per cent in Q1, from 48 per cent in Q1 2016.

Dialog in Sri Lanka delivered 6.6 per cent annual revenue growth, with data revenue increasing 42 per cent. It added 1.7 million mobile subscribers over the past year to end March with 12.3 million. Blended ARPU fell 4.5 per cent to SLR375 ($2.43), and smartphone penetration rose to 46 per cent from 36 per cent.

Revenue at Bangladesh business Robi of MYR870 million was 38 per cent higher than Q1 2016, fuelled by an 83 per cent jump in data revenue. Smartphone penetration stood at 30 per cent, and blended ARPU was fairly stable at BDT133 ($1.63).

Smart in Cambodia posted a 24 per cent rise in revenue to MYR318 million. Data revenue soared 57 per cent year-on-year, accounting for 48.5 per cent of the total in Q1. Data subscribers grew 10 per cent year-on-year to 3.6 million.

Newly-acquired Ncell in Nepal reported a dip in Q1 revenue due to a decline in international long distance revenue and aggressive data pricing. Data turnover grew 70 per cent year-on-year and accounted for 17 per cent of total revenue. Blended ARPU dropped 15 per cent year-on-year to NRP298 ($3.64).

Idea Cellular in India generated a net loss of MRY25 million during the recent quarter, compared with a MYR65 million profit in Q1 2016. Revenue declined 1 per cent.

For the full year 2017 Axiata forecasts 9 per cent to 11 per cent growth in revenue, with capex of MYR6.4 billion.