Malaysia-based Axiata Group posted a sharp increase in earnings and revenue in Q3, but the results were lifted by forex gains while its units in Indonesia and Malaysia continued to face headwinds.

The group’s Q3 net profit grew 40.2 per cent to MYR891 million ($209.8 million) year-on-year, while EBITDA increased 9.6 per cent to MYR1.86 billion. In constant currency terms EBITDA was up just 0.3 per cent. Its earnings was also boosted by a one-off gain from the tower sale at XL and partially off-set by a one-time tax provision at its Sri Lankan unit Dialog.

Axiata’s revenue during the quarter expanded 8.9 per cent to MYR5.06 billion, but was down 0.3 per cent in constant currency terms.

Axiata president and CEO Jamaludin Ibrahim said: “This has been a steady but encouraging quarter for the group. Dialog and Smart (Philippines) have performed exceptionally well. Celcom (Malaysia) is regaining customers steadily while XL has started to reap benefits from the ongoing implementation of its transformation programme”.

Celcom in Malaysia lost 700,000 subscribers over the past year and saw revenue fall 6.7 per cent in the quarter to MYR1.8 billion. EBITDA declined 7.7 per cent to MYR677 million. Its EBITDA margin fell to 22.6 per cent from 25.6 per cent a year ago.

Axiata stated “Celcom’s performance remains challenging but has generally stabilised”. After two consecutive quarters of service revenue decline, Q3 turnover was up 0.7 per cent from the previous quarter.

Data growth continued, with data revenue accounting for 29 per cent of service revenue – up from 23 per cent a year ago. ARPU edged up from MYR44 to MYR45 ($10.60) over the last year. Smartphone penetration rose to 59 per cent fom 41 per cent a year ago.

Slow progress in Indonesia
XL in Indonesia continued to lose subscribers in Q3, with its user base diving 29 per cent to 41.5 million – down by more than 16 million. It did manage to add 19,000 postpaid customers year-on-year, and blended ARPU jumped 41 per cent to IDR38,000 ($2.73).

Revenue during the quarter fell 3 per cent to IDR5.85 trillion ($420 million), and data revenue growth is slowing. Data has accounted for 26 per cent of revenue for the past three quarters and 24 per cent a year ago. Smartphone penetration increased to 38 per cent from 25 per cent a year ago.

EBITDA rose 6.6 per cent to IDR2.19 trillion, and its EBITDA margin increased to 37.5 per cent from 34.1 per cent a year ago.

XL has strengthened its financial position by reducing its US dollar debt exposure. It repaid and refinanced a total of $580 million of its unhedged US dollar debt over the last two quarters.

Dialog (Sri Lanka) added nearly one million customers over the past year and ARPU rose 5 per cent to SLR372 ($2.55). Data accounted for 19 per cent of total revenue, up from 13 per cent a year ago. Revenue increased 10.5 per cent to SLR18.8 billion ($128.7 million).

Its unit in Bangladesh, Robi, reported a 10 per cent increase in revenue to BDT13.4 billion ($169 million) as its customer base expanded 13.6 per cent to 28.4 million. ARPU declined 9.5 per cent over the past year to BDT142 ($1.80). Data accounted for 10 per cent of service revenue, which was the same as in Q1. Smartphone penetration rose to 17 per cent from 8 per cent a year ago.

Axiata said it is on target to hit its 4 per cent revenue target for the full year but was “slightly below” its 4 per cent EBITDA growth guidance.