Axiata 3Q profit drops 12% to RM631 mil

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KUALA LUMPUR (Nov 24): Axiata Group Bhd posted a 12% decline in third quarter net profit from a year earlier, as the mobile telecommunication network provider registered weaker financials at its Malaysia and Indonesia operations.

In a statement to Bursa Malaysia today, Axiata said net profit fell to RM631.03 million in the third quarter ended September 30, 2014 (3QFY14), from RM715.05 million. Revenue fell to RM4.65 billion, from RM4.75 billion.

Axiata said revenue was mainly dragged down by its Malaysia and Indonesia units' lower revenue contribution.

"Malaysia’s gross revenue declined by 4.3% in Q3’14, driven by decline in voice and SMS revenue by 6.9% and 30.6% respectively. PAT declined by 31.0% to RM409.6 million, due to lower EBITDA and higher taxation in Q3’14," Axiata said.
 
In Indonesia, Axiata noted foreign exchange (forex) losses from its unit, PT XL Axiata Tbk, was a crucial factor that drove group bottom line lower.

The forex losses were due to a weaker rupiah.

"Gross revenue of Indonesia decreased by 4.5%, mainly due to translation impact of a weaker IDR (rupiah) against RM. Indonesia recorded loss after tax of RM128.4 million, mainly due to lower Ebitda and higher depreciation and amortisation driven by Axis consolidation and weaker IDR against RM," Axita said.

In the cumulative nine-month period, Axiata registered a lower net profit of RM1.75 billion, from RM1.97 billion a year earlier. This came on the back of higher revenue at RM13.9 billion, versus RM13.86 billion.

Axiata President and Group Chief Executive Officer Datuk Seri Jamaludin Ibrahim said in a statement that he was confident to see a “turnaround” of performance in the final quarter of the year.

Jamaludin said Axiata expected to regain customers and dealers' confidence, with the company's enhanced ability to expedite launch of new products and deliver better customer service.

“Moving forward, I am pleased to note that the two year IT transformation project at Celcom has now been completed with the issues resolved.

“Data remains a priority, given the speed of growth, and is expected to grow faster across Axiata markets, facilitated by higher smartphone adoption,” Jamaludin noted.

Axiata shares rose 10 sen or 1.4% gains to RM7.20 at 2.43pm, giving the company  a market capitalisation of some RM62 billion. The stock saw some 13 million shares done.