This article first appeared in The Edge Financial Daily on May 29, 2019

KUALA LUMPUR: Telecommunication group Axiata Group Bhd made a turnaround — after reporting four consecutive quarterly losses — by posting a net profit of RM709.05 million for the first quarter ended March 31, 2019 (1QFY19), compared to a net loss of RM147.41 million in the previous corresponding quarter.

In a bourse filing, Axiata attributed the quarterly profit to better top line and gain on disposal of RM113 million from divesting its stake in Singapore telecommunication company M1 Ltd; however the discontinuation of profit sharing in M1 tempered its performance.

This resulted in the group recording earnings per share of 7.8 sen compared to a loss per share of 1.6 sen a year prior.

Quarterly revenue grew 3.5% to RM5.95 billion from RM5.75 billion a year ago, driven by better performance from all operating companies apart from its mobile operations in Malaysia and Nepal.

“Amid a muted performance in the Malaysian market where interconnection rates are lower and domestic roaming revenue is falling, Celcom kept core mobile revenues steady.

“XL (Axiata) in Indonesia enjoyed a boost early this year from data monetisation and acceleration. Dialog in Sri Lanka and Smart in Cambodia continued to deliver solid performance while Robi in Bangladesh posted strong double-digit expansion across all metrics year-on-year driven by data upsurge. Ncell in Nepal sustained its Ebitda (earnings before interest, taxes, depreciation, and amortisation) margin despite international long distance revenue pressures,” said Axiata.

Based on the performance of the group to date, Axiata expects the group’s performance for FY19 to be broadly in line with headline key performance indicators (KPIs).

Axiata’s FY19 KPI targets revenue to grow between 3% and 4%, while Ebitda is targeted to expand by 5% to 8%, and return on invested capital is expected to grow by 5.2% to 5.6%

Shares in Axiata closed unchanged at RM4.54 yesterday, giving it a market capitalisation of RM41.44 billion. The counter saw some 12.62 million shares traded.