Axiata performs better than expected

Group cautiously optimistic about prospects in 2021

PETALING JAYA: Axiata Group Bhd, which reported a net profit of Rm365.16mil for the financial year 2020, is cautiously optimistic about its prospects in 2021.

President and group chief executive officer Datuk Izzaddin Idris said the group is targeting low single digit revenue and earnings before interest, depreciation and amortisation (Ebitda) growth for 2021, on the back of the anticipated recovery that will be spurred by global vaccination efforts.

Net profit of Rm365.16mil was lower than the Rm1.46bil posted in 2019 while revenue was marginally lower at Rm24.20bil,compared with Rm24.58bil a year earlier.

“In the first quarter of last year, we thought 2020 will be a disastrous year for us, but we did better than expected.

“The challenges still remain, if not until the first half of the year, perhaps until the third quarter. But given the improvements made, especially with the vaccine rollout, we think we will be able to sustain our performance in 2021,” he said during a virtual press conference on the group’s 2020 financial year yesterday.

Axiata has also allocated Rm6.5bil for capital expenditure (capex) for 2021.

“In this business, it’s important to spend on capex and you can’t defer it if there is a need for it,” he said.

For the fourth quarter ended Dec 31, 2020, Axiata posted a net loss of Rm255.96mil on revenue of Rm6.26bil.

Axiata’s fourth quarter earnings was impacted by accelerated depreciation and write-off of assets, mainly for 3G assets amounting to Rm1.07bil.

As a result, group net profit and profit after tax and minority interests decreased significantly to record a net loss of Rm398.4mil and Rm256mil respectively.

Revenue in the fourth quarter was down 5.5%, as a result of the Covid-19 impact and containment measures. However, Ebitda registered a growth of 14% to Rm794.8mil, due to lower operating costs.

Izzaddin also said the group expected its digital services business to breakeven by 2022. He added that Axiata has no immediate plans to list its tower company edotco Group Sdn Bhd, an initiative that had been on the back burner since 2018.

“Given the current situation, we don’t think it’s a good time to list. Right now, our focus is to grow edotco’s business,” he said.

During its 2020 financial year, Axiata said revenue for wholly-owned Celcom Axiata Bhd declined 8.8% from lower prepaid and postpaid revenue and average revenue per user dilution, cushioned by higher home and mobile virtual network operator revenue.

“However, Celcom’s revenue has shown signs of recovery with revenue ex-device growth in the third and fourth quarter consecutively from the increase in subscriber base,” Axiata said in a filing with Bursa Malaysia yesterday.

Axiata said it had ,on Feb 24, 2021, declared a tax exempt dividend of five sen under a single-tier system per ordinary share of the company, in respect of the financial year ended Dec 31, 2020.

“With the vaccine rollout, we think we will be able to sustain our performance in 2021.” Datuk Izzaddin Idris