Axiata Group returned to profit in the first quarter of the year and total revenue increased as weakness in Malaysia and Nepal was offset by strength across the rest of its operations.

The operator’s net profit in the quarter rose to MYR709 million ($169 million), reversing a loss of MYR147 million in Q1 2018. The turnaround was due to gains from the sale of its interest in Singapore operator M1 (MYR1.65 billion) and divestment of non-core digital businesses.

Revenue increased 3.5 per cent year-on-year to MYR5.95 billion, driven by an improved performance from all operating companies apart from Celcom (Malaysia) and Ncell (Nepal).

In a statement, the company said XL in Indonesia, reporting its highest market share by subscribers in four years, and Robi in Bangladesh returned to profit in the quarter.

Axiata president and CEO Jamaludin Ibrahim said: “We had one of our best quarters ever with an upsurge in headline profitability on the back of gains from our portfolio rationalisation exercises involving the M1 divestment and the carving out of our non-core Digital Ventures from our portfolio.”

He added that the group’s cost optimisation programme yielded MYR262 million in savings and is on track to meet the full-year target of MYR1.2 billion.

Weakness in Malaysia
Mobile service revenue at Celcom fell 4.7 per cent year-on-year to MYR1.42 billion, with the company attributing the decline to lower regulated mobile termination rates and wholesale revenue. Overall revenue fell 7.4 per cent to MYR1.66 billion as a result of a sharp drop in device sales.

Its mobile subscriber base in Malaysia dropped 6.8 per cent year-on-year to end March at 8.95 million, while blended ARPU increased 4.3 per cent to MYR69. Smartphone penetration rose to 80 per cent from 77 per cent in Q1 2018. The operator said 4G population coverage increased to 93 per cent.

Ncell’s revenue dropped by 9.5 per cent to MYR498 million, as almost all revenue segments declined due to the impact of government mandated service charge reductions in mid-July 2018. Its subscriber base remained stable year-on-year at 16.4 million. Blended ARPU declined 3.9 per cent NPR272 ($2.40).

XL saw mobile turnover climb 12 per cent, with total revenue increasing 8.8 per cent to MYR1.73 billion. It added more than 500,000 subscribers year-on-year to finish the quarter with 55.1 million subs. Prepaid ARPU fell 6.9 per cent to IDR31,000 ($2.15), and post-paid ARPU rose 7.5 per cent to IDR114,000. Data revenue accounted for 86 of service revenue in the quarter.

The operator said continued network investments in Indonesia, in particular outside of Java, boosted its 4G base stations count to 33,000 across 405 cities and towns.

Robi registered 16.1 per cent revenue growth to MYR892.4 million, with strength across all segments. Dialog in Sri Lanka saw revenue remain stable at MYR661 million due to a drop in the value of the rupee. In local currency terms, turnover rose 11.2 per cent on the back of strong growth in data revenue.

The group’s tower unit edotco reported a 25.3 per cent increase in revenue to MYR430 million.

Commenting on the proposed merger between Axiata and Telenor’s Asian operation, Ibrahim said it will have a dedicated team looking into the details of the project over the next three months, separate from the rest of the management team. “As far as the group is concerned, it is business as usual and achieving the 2019 targets would remain as key priorities for all operating units,” he said.