Axiata 2Q net profit up 34.2%, declares 8 sen dividend

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KUALA LUMPUR (Aug 20): Axiata Group Bhd recorded a 34.2% increase in net profit for its second financial quarter ended June 30, 2015 (2QFY15) to RM610.76 million or 7.1 sen per share from RM455.01 million or 5.3 sen per share in 2QFY14, mainly due to lower losses from its Indonesian operations, PT XL Axiata Tbk, arising from lower foreign exchange losses and net finance costs.

In its filing to Bursa Malaysia today, Axiata said that higher profits were also recorded by its Sri Lanka operations Dialog Axiata PLC and Cambodia operations Smart Axiata Co Ltd, and share of profits from its associate company in India, Idea Cellular Ltd, had also increased significantly.

The group has also proposed an interim dividend of 8 sen per share, and said that the company’s Dividend Reinvestment Scheme will apply to the interim dividend, whereby shareholders will be given the option to elect to reinvest the whole or part of the dividend into new ordinary shares of the company.

In terms of revenue, Axiata reported 2QFY15 revenue of RM4.71 billion, which was a marginal decrease of 0.5% compared to last year when it reported a revenue of RM4.73 billion, which was attributed to lower revenues in Malaysia and Indonesia.

For its first half ended June 30, 2015 (1HFY15) Axiata reported a 5.8% increase in net profit to RM1.2 billion, from RM1.13 billion in 1HFY14, mainly due to higher profits from its Sri Lanka and Cambodia operations.

Revenue for 1HFY15 also increased by 2.3% to RM9.46 billion, from RM9.25 billion a year ago, on higher revenue from Sri Lanka and Cambodia.

Axiata president and group chief executive officer Datuk Sri Jamaludin Ibrahim said that Celcom Axiata Bhd and XL Axiata have both showed early signs of progress, despite the challenging market and industry conditions.

“Celcom has added more than 60,000 net subscribers for the first time in three quarters post its IT transformation, successfully rolling out new products and better services ... while Celcom’s IT transformation issues are generally resolved and we are making significant progress in regaining some goodwill that was lost last year, there is still more to be done to see sustainable traction.

“Meanwhile, we have also clear and concrete plans to strengthen XL’s balance sheet to reduce US dollar exposure,” he said in a statement today.

At close of noon market today, Axiata (fundamental: 0.85; valuation: 1.1) shares traded down 8 sen, or 1.38% to RM5.70, with 1.83 million shares traded and a market capitalisation of RM49.7 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)