Axiata’s full-year 2012 results in line with expectations — Moody’s
KUALA LUMPUR: Moody’s Investors Service says Axiata Group Bhd’s (Axiata) full-year results for 2012 are in line with Moody’s expectations.
“As such, there is no immediate impact on Axiata’s current Baa2 rating and stable outlook,” it said in a statement.
Axiata’s revenue grew by 7.3 per cent year on year led by data revenue growth primarily at Celcom in Malaysia and XL Axiata in Indonesia.
The company reported an earnings before interest, tax, depreciation and amortisation (EBITDA) margin of 42.1 per cent for the year ended December 2012, a decline of 1.2 percentage points year on year.
The ratings house said the moderate decline in EBITDA margins was within its expectations for Axiata given the changing revenue mix in favour of data services, which remain under-utilised, as well as network expansion costs mainly in Indonesia.
“Moody’s expects moderate contraction in EBITDA margins to continue over the next one to two years resulting from elevated competition in the voice and SMS segments and still sub-optimal data utilisation,” said Moody’s Analyst Nidhi Dhruv.
Dhruv said Axiata’s dividend payout ratio of 70 per cent for 2012 was higher than the company’s earlier guidance of 65 per cent payout but remains in line with Axiata’s stated strategy of a progressive dividend policy.
“Increased shareholder returns, coupled with continued high capex spending will weaken cashflow metrics, which in Moody’s view, will continue to be inconsistent with the rating level.
“However, Axiata’s overall financial and credit profile remains strong for its Baa2 rating,” added Dhruv. Axiata’s ratings remain well positioned at the Baa2 rating level, supported by strengthening financial and operating profile, driven by an improved operating performance across substantially all of its cellular subsidiaries across the region. Axiata is one of Asia’s largest regional cellular telecommunications providers with about 215.7 million subscribers as at Dec 31, 2012.