KUALA LUMPUR (Feb 22): Axiata Group Bhd staged a turnaround in the fourth quarter ended Dec 31, 2021 (4QFY21) with a net profit of RM116.02 million, compared to a net loss of RM255.96 million a year ago, mainly led by a higher top line and lower depreciation and amortisation. This was offset by impairment of Ncell Axiata Ltd's goodwill of RM338.4 million during the quarter under review.
As a result, the group posted earnings per share of 1.3 sen for 4QFY21, compared to a loss per share of 2.8 sen for 4QFY20.
Revenue for the quarter under review rose 10.2% to RM6.9 billion, from RM6.26 billion a year ago, on the back of growth across all operating companies except for its Nepalese subsidiary Ncell.
The group also declared a second interim dividend of 5.5 sen per share, bringing total dividends for FY21 to 9.5 sen, equivalent to a RM871.5 million payout. The details of entitlement and the payment date of the dividend will be determined and announced in due course.
In a bourse filing on Tuesday (Feb 22), Axiata said it registered lower depreciation and amortisation in 4QFY21 as there was accelerated depreciation of 3G assets amounting to RM1.07 billion in 4QFY20. This, however, was partially offset by higher foreign exchange losses, higher finance costs, higher taxes and one-off impairment of goodwill of mobile operations in Nepal amounting to RM338.4 million in 4QFY21.
The improved quarterly performance helped Axiata end FY21 on a positive note, posting a net profit of RM818.9 million, up 124.3% from RM365.16 million for the previous year. Revenue increased 7% to RM25.9 billion for FY21 from RM24.2 billion for FY20.
Its earnings before interest, taxes, depreciation and amortisation (EBITDA) climbed 8.5% year-on-year to RM11.4 billion for FY21, mainly contributed by its units Celcom Axiata Bhd, Dialog Axiata PLC, edotco Group Sdn Bhd and Axiata Digital Services Sdn Bhd.
In FY21, Axiata also achieved cost excellence through operating expenses and capital expenditure savings of RM696 million and RM1.3 billion respectively, totalling RM2 billion.
Additionally, it closed the year with a resilient balance sheet as gross debt/EBITDA hit 2.56 times with the acquisition of Touch Mindscape, while its cash balance remained healthy at RM7 billion.
Axiata plans RM7.1b capex for 2022
Axiata president and group chief executive officer Datuk Izzaddin Idris said the group plans to invest RM7.1 billion in capital expenditure (capex) this year.
He said entering 2022, the group will be focused on sustaining its growth momentum and is circumspect in targeting a mid-single digit for revenue growth and a high single digit for earnings before interest and taxes (EBIT) growth in view of prevailing tough external conditions.
“Moving forward, we will be closely monitoring macroeconomic, regulatory and industry risks in addition to developments in Myanmar. Business-wise, we are positive about upsides in Indonesia, a revenue uplift from demand for data, digital content and enterprise digital transformation as well as the integration of completed acquisitions in 2021. We’re also looking at potential inorganic opportunities in 2022,” he said.
He also noted the group’s financial performance in FY21 had surpassed its headline key performance indicator guidance of low single digits to record revenue and EBITDA growth of 8.3% and 8.5% respectively.
“The strong organic growth in revenue and EBITDA, and increased profits as a result, stemmed from deliberate steps taken to adjust and strengthen our foundations to position for the digitally accelerated environment we have experienced."
According to Izzaddin, all the group’s operating companies (OpCos) played their parts in the rigourous execution of the Axiata 5.0 vision, which focuses on positioning for new norms, OpCo transformation and driving structural changes to future-proof the group.
“Notably, Celcom demonstrated a strong recovery in key metrics on the back of over 900,000 subscriber acquisitions, thanks to improved go-to-market strategy covering products, networks and distribution.
“At the same time, ADA is well placed to support digital marketing transformation for enterprises and Boost is prepared to meet rising demand for fintech services. For Ncell, while revenue continued to be dragged by lockdowns and competitive pressures, we are encouraged by the growth in EBITDA on the back of cost controls and its healthy EBITDA margin,” he added.
At Tuesday's noon break, Axiata shares were down two sen or 0.51% at RM3.87, bringing a market capitalisation of RM35.51 billion. The counter has risen 13.49% over the past year.