Edotco: RM4b to buy 13,000 towers in Pakistan
> Axiata’s Q2 net profit doubles on forex gains and lower taxation
PETALING JAYA: Axiata Group Bhd, which saw net profit for the second quarter ended June 30, 2017 more than double on foreign exchange gains and lower taxation, announced at a media briefing yesterday the acquisition by its infrastructure subsidiary of 13,000 towers in Pakistan from Pakistan Mobile Communications Ltd (PMCL) for US$970 million (RM4 billion), the telco’s biggest expansion plan thus far.
The acquisition will grow edotco Group Sdn Bhd’s portfolio of towers in six countries to almost 40,000, making it the eighth largest independent tower company and second largest multicountry tower operator globally, based on Tower Exchange’s Journal of the Telecom Tower Industry figures as at May 2017.
The purchase of PMCL’s tower subsidiary, Deodar Private Ltd, will be funded through a combination of external local debt of US$600 million and an equity split of US$174 million by edotco and equity injection of US$166 million by Dawood Hercules Corp Ltd (DH Corp).
DH Corp’s capital will accord it with a 45% stake in edotco Pakistan Private Ltd, leaving edotco with a 55% stake in edotco Pakistan. DH Corp is a conglomerate listed on the Pakistan Stock Exchange with a market capitalisation of US$600 million.
According to estimates by Axiata, the purchase could lead to an increase of US$600 million in borrowings for the group, which stood at RM22.3 billion as at Dec 31, 2016.
In a filing with the stock exchange, Axiata said it made a net profit of RM407.2 million for the second quarter 2017, compared with RM188.9 million for the same quarter in the year 2016.
Operating profit before finance for the quarter under review was slightly lower at RM855.1 million, compared with RM857.8 million for the second quarter ended June 30, 2016. This was on a 14% increase in revenue to RM6.1 billion, compared with RM5.3 billion for the quarter in 2016.
Net profit for the six month ended June 30, 2017 was up almost 16% to RM646.2 million, compared with RM557.2 million for the same period in 2016. This was achieved on a 15.7% jump in revenue to RM11.9 billion, from RM10.3 billion the year before.
The group’s share price closed eight sen higher at RM4.93 yesterday, with 5.05 million shares changing hands. This gives Axiata a market capitalisation of RM44.3 billion.