Telco may miss profit, revenue growth targets

> Earnings for Q3 down 71% to RM256.56 million

PETALING JAYA: Axiata Group Bhd, which warned yesterday that it may miss its self-imposed key performance indicators, saw net profit for the third quarter ended Sept 30, 2016 fall 71% on higher operating costs from higher depreciation and amortisation charges in Indonesia and Bangladesh, net finance cost, foreign translation losses and lower contribution from associates.

The group made a net profit of RM256.56 million for the quarter, compared with RM891.39 million for the same quarter in 2015.

This was despite revenue coming in 7.7% higher at RM5.46 billion for the quarter under review compared with RM5.07 billion for the same period in 2015.

The group said based on its performance to date, recent adverse economic developments in the group’s major operating countries and foreign currency fluctuations, it may not meet revenue and earnings before interest taxation depreciation and amortisation (ebitda) growth targets of 9.8%, and 13.7% respectively set early in the year, with the ringgit trading at 3.9 against the dollar.

It said among the key risks facing its operating companies include regulatory challenges (e.g. taxes particularly in Nepal and Sri Lanka, etc.), intense competition (in Malaysia, Indonesia, Bangladesh and India) and foreign currency fluctuations.

“Moving forward, the group will continue to focus on its long-term transformation strategy, which includes portfolio rebalancing to enhance shareholders’ value, new approach to current business, venturing into new businesses adjacent to current business, selectively acquiring new assets and managing existing business via data leadership and enhancing data profitability by focusing on pricing, smart investments, network capacity utilisation and other cost saving initiatives including forex mitigation strategies,” Axiata said in its filing with Bursa Malaysia.

Net profit for the nine month ended Sept 30, 2016 was down 61% to RM813.75 million compared with RM2.087 billion for the same period in 2015.

Revenue for the period was up 8.6% to RM15.775 billion, compared with RM14.523 billion for the same period ended Sept 30, 2015.