KUALA LUMPUR (Aug 27): Axiata Group Bhd's net profit dropped 30.55% to RM447.82 million in the second quarter ended June 30, 2014 (2QFY14) from RM644.78 million in the previous corresponding period.

In a filing with Bursa Malaysia today, mobile telecommunication network provider Axiata said the profit decline was mainly due to foreign exchange (forex) losses, integration of Axis' business in Indonesia and lower contribution from Malaysia. These factors had offset higher profit at Axiata's Sri Lanka, Bangladesh and Cambodia units

Axiata said revenue, however, rose to RM4.73 billion from RM4.63 billion. During 2QFY14, Axiata registered higher net forex losses on financing activities of RM162.04 million compared with RM42.83 million a year earlier, its income statement showed.

The group declared an interim tax exempt dividend of eight sen a share for 2QFY14.

"It was a mixed quarter for the group. Whilst Celcom, the Axis acquisition and foreign exchange translation dragged earnings in the short term, overall good operating performance was seen in all other markets," said Tan Sri Azman Mokhtar, chairman of Axiata in a separate statement.

"In this regard, we declared an interim dividend of 8 sen per share," Azman said

For 1HFY14, Axiata's net profit dropped to RM1.12 billion from RM1.26 billion a year earlier despite revenue increasing to RM9.25 billion against RM9.11 billion.

Axiata's President and Group CEO Datuk Seri Jamaludin Ibrahim said the rupiah had contributed to the 2QFY14 forex losses

Jamaludin said the decline of the rupiah had an impact on the results but the bulk of the foreign exchange losses was unrealised.

"Strong performance was posted by Dialog, Robi & Smart. Smart in particular had a stellar first half with double-digit growth across all financial metrics," he said.

Looking forward, Axiata notes that currency volatility is still a concern.

The group remains optimistic of its outlook saying, "But our business remains strong and we continue to execute strongly on our strategy to deliver long term growth.

Based on the performance so far, at constant currency and barring any external factors that could materially affect our performance in the second half of the year, we expect the group performance to be in line with the KPIs, albeit at slightly lower revenue growth,¨Jamaludin said.