Axiata Group reported mixed results in Q1 as strong growth in data revenue helped drive a solid increase in overall revenue, but Celcom’s continued weak performance hurt the group’s profit.
Jamaludin Ibrahim, Axiata’s president and CEO, said, except for Malaysia’s Celcom, most of its operating companies registered improved year-on-year revenue growth, with Dialog in Sri Lanka and Smart in Cambodia performing exceptionally well and XL showing continued stronger growth as a result of its ongoing transformation agenda.
“I am pleased to note there are many positive signs. Celcom has been aggressively rolling out more LTE sites and a number of competitive data products and services over the last two months. I am confident with these initiatives in place, Celcom will be back on track to finish the year respectably,” he said.
Total group revenue increased 5.4 per cent to MYR5 billion ($1.28 billion) year-on-year, fuelled in large part by a 23 per cent jump in data revenue. The company also benefited strongly from forex gains as a result of the weaker ringgit.
Its net profit fell 37 per cent to MYR368 million, impacted by higher net finance costs and increased depreciation costs arising from growth driven capex as well as lower contribution from indirectly held associates, he said. EBITDA expanded 7.7 per cent to MYR1.9 billion, which it credited to a reduction in operating expenses. Its EBITDA margin rose 0.7 points to 37.4 per cent, which was its highest in the seven quarters.
Its Malaysia unit, Celcom, continued to face challenges, with a 20 per cent drop in value-added service revenue and a 13 per cent decline in voice pushing overall revenue down by 13.3 per cent to MYR1.66 billion. But mobile data revenue and mobile internet revenue for the quarter grew 14.8 per cent and 35.4 per cent respectively.
XL in Indonesia saw revenue rise 12.2 per cent to MYR1.74 billion (just 2.5 per cent in local currency terms) as it continued to expand its subscriber base, after facing large losses last year. It added about 600,000 new customers in the quarter. ARPU increased by 39 per cent to IDR39,000 ($3.95).
Dialog in Sri Lanka saw revenue increase 30 per cent to MYR613 million (22 per cent in local currency terms), with mobile turnover up 22.3 per cent and mobile data revenue jumping 60 per cent due to higher subscriber additions and an increase in data usage.
Robi in Bangladesh, affected by factors such as heightened competition and an industry-wide drop in subscriber base impacted by biometric registration, posted a 2.7 per cent drop in revenue in local currency terms, but a 12 per cent increase when converted to ringgit. Its data subscribers, however, grew by 8.3 per cent year-on-year to 13 million and contributed to a 19 per cent increase in data revenue. Data revenue accounted for 12.4 per cent of its revenue during the quarter.
Smart’s (Cambodia) revenue rose 8.6 per cent in local currency terms and 26 per cent in ringgit terms, as its subscriber base grew 53 per cent year-on-year to 3.2 million. Data revenue expanded 42 per cent, with data revenue contributing 36 per cent of Q1 revenue.
Despite a slow start to the year, Ibrahim said the company’s KPIs for the year remain unchanged – 12.2 per cent growth in revenue and 16 per cent growth in EBITDA.
“As a group we have announced our biggest capex spend for 2016, primarily for investment in data in line with strategies to cement our mobile data leadership in all markets where we operate.”
Capex was up 26 per cent in Q1 to MYR1.05 billion.