Telco may miss profit, rev­enue growth tar­gets

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

The Sun (Malaysia) - - SUNBIZ -

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.

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