Axiata profit jumps 8% as Celcom, XL return to growth in Q4 - Mobile World Live

Axiata profit jumps 8% as Celcom, XL return to growth in Q4

17 FEB 2016

Axiata Group reported strong profit and revenue growth last year as its two largest subsidiaries – Celcom and XL — returned to growth in Q4 and it benefitted from one-off forex and tower disposal gains.

Its profit after tax last year rose 8 per cent to MYR2.6 billion ($627 million), driven by improved results at Dialog, Smart, Idea and M1 and one-off gains from XL selling off towers. EBITDA grew by 4 per cent to MYR7.3 billion, with an EBITDA margin of 36.6 per cent, down 0.8 percentage points from the previous year.

The group closed the year with strong topline growth in Q4, up 11.4 per cent year-on-year. A steady performance across its operating companies and forex gains led to a 6.3 per cent increase in revenue to MYR19.9 billion last year.

The group’s two largest units demonstrated strong quarter-on-quarter growth, with Celcom posting its first revenue growth after three quarters of declines, while XL’s transformation agenda showed promising results and recorded its third successive quarterly improvement.

Celcom’s revenue for the full year, however, was down 5 per cent, with service revenue declining 6.8 per cent year-on-year primarily due to heightened competition. Its mobile data revenue grew 21 per cent. XL, which saw its user base drop sharply in 2015, added nearly 500,000 subscribers during the final quarter. In implementing its strategy of attracting higher value customers, XL recorded 8 per cent growth in blended ARPU quarter-on-quarter in Q4.

Continued data growth
Overall data revenue expanded 30 per cent, with continued data growth at Smart in Cambodia (86 per cent), Robi in Bangladesh (79 per cent) and Dialog in Sri Lanka (63 per cent).

Axiata president and CEO Jamaludin Ibrahim noted that it recorded strong headline numbers, especially in revenue and after tax profit on the back of some one-off gains, forex translations, but also from outstanding performance at Dialog, Smart and Robi.

“XL has made encouraging progress with three consecutive improved quarters and a significantly improved balance sheet. Hampered by a flat market, we recognise Celcom has a fair bit to go to fully regain its footing, but we can expect to see better results in the coming quarters,” he said.

Jamaludin said that as smartphone penetration continues to dominate consumer demands, data and investment in data infrastructure remains a priority in driving significant data growth across all its markets. “We hope to see a stronger recovery at Celcom. We are also confident XL’s transformation agenda will show further traction during the year.”

The operator said it hedged 67 per cent of its US dollar-denominated external debt, particularly in Indonesia as a result of initiatives taken to mitigate currency volatility.

Last year Axiata expanded its tower business, edotco, with the acquisition of a 75 per cent stake in Digicel’s Myanmar venture, Myanmar Tower Company. Its proposed acquisition of Ncell from TeliaSonera will give it a controlling stake in Nepal’s leading operator.

Axiata expects heightened competition in Malaysia, Bangladesh and Cambodia. Other regulatory and market challenges include pricing and fee structure uncertainties as a result of spectrum reallocation in Malaysia.

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Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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