Axiata post Q1 net loss due to strengthening ringgit, Idea Cellular

KUALA LUMPUR: The combination of a strengthened ringgit and losses resulting from its Indian operations saw Axiata Group Bhd posting a RM94.35 million net loss in the first quarter ended March 31, 2018, down from a net profit of RM262.03 million recorded in the same corresponding quarter in 2017.

The telecommunications group also recorded a lower revenue of RM5.74 billion compared with last year’s RM5.88 billion.

In a filing with Bursa Malaysia yesterday, Axiata said losses from its share in India’s Idea Cellular Ltd widened to RM124.3 million compared with a RM25.4 million loss in 2017.

“The Indian telecommunications market continues to struggle with a devastating price war and a hyper competitive market,” it said.

The group also recorded a noncash dilution loss of RM357.6 million from non-participation of preferential new shares issued.

President and Group Chief Executive Officer Tan Sri Jamaludin Ibrahim said the first quarter results was also distorted by adverse currency impact as the ringgit strengthened on an average of 12 per cent against all operating companies market currencies.

“Excluding those factors, the overall underlying performance was good with all operating companies performing better than industry peers in their respective markets and we gained significant revenue market share in Malaysia, Indonesia, Sri Lanka and Bangladesh.

“Celcom’s turnaround performance continues to gain momentum, and overall, we see quarter-on-quarter improvements in key performance drivers,” he said, adding while the Indonesian market’s dynamics and structural changes impacted the entire industry, the changes would lead to a healthier market environment ahead.

“We are pleased that PT XL Axiata Tbk was the least impacted by these changes and we look forward to a better performance as it continues to execute its transformation agenda,” he said.

Moving forward, Jamaludin said the group would continue to invest in key digital businesses such as digital financial services, enterprise solutions and the Internet of Things.

“In our newer business portfolios, we believe edotco’s (edotco Group Sdn Bhd) growth and expansion will bring material gains for the group,” he said.

Meanwhile, the Axiata chief said the group saw regulatory issues in Sri Lanka, Malaysia and Bangladesh, as well as, currency fluctuations as challenges in 2018.

“Axiata’s investment in India would remain challenging as seen in foreign operators either exiting the market or consolidating due to the current state of the industry there.

“Delays in the proposed merger between Idea and Vodafone India will bring further impact to Axiata,” he added.