KUALA LUMPUR: Axiata Group Bhd slid into a net loss of RM42.9mil in the first quarter ended March 31 against a net profit of RM75.56mil a year ago, due to significant foreign exchange (forex) losses of RM476.9mil.
The telco said the forex losses were mainly contributed by mobile operations in Sri Lanka.
Excluding the foreign exchange losses, Axiata said its net profit would have increased by more than 100% to RM357.9mil, driven by higher top lines, partially offset by higher finance costs, higher taxes and lower one-off gains.
Axiata’s revenue in the first quarter increased by 6.7% year-on-year (y-o-y) to RM6.47bil from RM6.06bil in the previous corresponding quarter.
The group said that its revenue was driven by all its operating companies (OpCos), except Ncell Axiata Ltd. Ncell is Axiata’s private mobile service provider operating in Nepal.
It noted that the stronger revenue was achieved, despite bracing against external impacts such as headwinds in Sri Lanka and macroeconomic uncertainties stemming from the slowing of major economies.
During the quarter, Axiata achieved cost excellence through capital expenditure (capex) and operational expenditure (opex) savings of RM163mil and RM78mil, adding up to RM241mil in total savings.
The group’s balance sheet held steady with gross debt/Ebitda (earnings before interest, tax, depreciation and amortisation) within the target limit at 2.49x, net debt/Ebitda at 1.99x and a cash balance of RM5.8bil.
One of its operating companies (OpCos), Celcom Axiata Bhd, sustained its positive momentum as “revenue ex-device” climbed 5.2% y-o-y driven by its prepaid business and contribution from new Enterprise Solution subsidiaries – Bridgenet Solutions and Infront Malaysia.
Consequently, net profit grew more than 100%, while being partly offset by higher tax from the one-off Cukai Makmur.
“Celcom remains committed to investing in modernising its widest network coverage to deliver reliable services and consistent performance, affordable to its customers, towards enabling improved connectivity and digital inclusion in Malaysia,” Axiata said in a statement.
Commenting on the group’s performance, Axiata president and group CEO Datuk Izzaddin Idris said the group has landed the first quarter of 2022 on a steady footing, given the challenging externalities.
“We are cautiously optimistic in our outlook for the rest of 2022 whilst externalities may persist in the medium-term.
“In addition to exercising prudence in our existing businesses through cost and operational efficiencies, we are doubling down to extract value from our deals.
“These involve the expansion of edotco’s tower business in the Philippines, Boost’s digital bank licence from Bank Negara and in Indonesia, the Hipernet Indodata and proposed Link Net acquisitions,” he said.
Meanwhile, Axiata chairman Tan Sri Shahril Ridza Ridzuan noted that significant deals have been closed or are in the midst of being completed in line with the plans to future-proof Axiata’s businesses as well as to serve new growth areas in home and enterprise digitalisation.
“As part of its rigorous governance standards and in order to keep serving our communities effectively, Axiata regularly assesses business, operational and financial risks.
“In view of significant headwinds, Board attention will be trained on steadying the group through current and future uncertainties affecting Dialog’s business in Sri Lanka as well as the negative effects of supply chain shocks and global inflation,” he added.