Axiata share price drops on RM5b loss announcement

KUALA LUMPUR: Axiata Group Bhd’s share price fell as much as 5.4 per cent yesterday following last week’s announcement of a RM5 billion net loss last year.

At 9am yesterday, Axiata’s share price opened at RM4.10 before retreating to an intra-day low of RM4.02 two minutes later. It ended 1.88 per cent lower at RM4.17.

On Friday, it finished 1.16 per cent lower at RM4.25.

Axiata anounced on Friday that it had made a RM1.66 billion net loss in the fourth quarter ended December 31.

This pushed its full-year net loss to RM5.03 billion although group revenue remained stable at RM23.88 billion, from RM24.4 billion recorded in 2017.

Axiata president and group chief executive officer Tan Sri Jamaluddin Ibrahim said the headline numbers at a glance can be alarming and miscontrued, as it was almost all due to non-cash items that were purely accounting treatments as opposed to fundamental performance.

“On the contrary, the underlying performance is very strong.

“It is also interesting as the very issue that caused the headlines could materially help us this year and in the years to come,” Jamaluddin said at the group’s results briefing on Friday.

Public Investment Bank Bhd (PublicInvest) has cut Axiata’s financial year 2019 and 2020 earnings forecasts by 18 per cent.

This comes after factoring in slower revenue growth for Malaysia, Bangladesh and Nepal, and higher network cost for Malaysia and Indonesia.

“We believe the overall industry landscape remains challenging for Axiata given the prevailing political and regulatory pressure while market competition is not likely to improve in 2019,” said PublicInvest.

The firm has downgraded Axiata to “underperform” from “neutral”, with a lower target price of RM3.65, from RM3.85 previously.