Axiata Group reported its highest revenue ever, breaking the MYR 20 billion barrier in 2016. Group revenue jumped 8.5 percent to MYR 21.6 billion compared to MYR 19.9 billion in the previous year, mainly boosted by positive fourth quarter contributions across most of the Axiata operating companies (OpCos). Group EBITDA rose 10 percent to MYR 8 billion, and the margin improved by 0.6 percentage points to 37.2 percent for the year, on the back of higher revenue.
The Group’s profit after tax, however, was impacted by three main factors, namely unprecedented external events; strategic investments for long-term growth including merger and acquisition related costs which were mostly one-offs; as well as underperformance of some OpCos and associates. Consequently, profit after tax reached MYR 657 million in 2016, compared to MYR 2.6 billion in 2015. FY16 normalised PAT, excluding one-off charges and reflecting operations only, would be MYR 1.5 billion.
Externally, the Ringgit depreciation and volatility against the US Dollar resulted in the group recording substantial pre-tax foreign exchange losses of MYR 685 million at profit after tax level mainly due to the USD-exposed debt incurred from the acquisition of Ncell. Increased competition in India with the entry of a "disruptive new player" resulted in considerably lower contribution from the group’s Associate by MYR 304 million, Axiata said. Ncell acquisition related costs amounted to MYR 313 million during the year, plus merger fee and related costs totaling MYR 87 million.
Axiata said its Celcom unit in Malaysia showed early signs of stabilising with quarter-on-quarter growth in service revenue, normalized EBITDA and normalised PATAMI of 1.4 percent, 10.9 percent and 1.8 percent, respectively. ARPU rose 4.1 percent, and the subscriber base expanded 3.2 percent quarter-on-quarter. However, its prepaid segment continues to face near-term challenges. Data revenue continues to be the driver for Celcom, increasing by 10 percent in FY16 driven by mobile internet revenue growth of 19 percent. Data revenue accounted for 34.1 percent of Celcom’s total revenue. Notwithstanding the improvements in the final two quarters, FY16 performance at Celcom was lower with revenue, normalised EBITDA and normalised PATAMI falling 9.8 percent, 17.6 percent and 29.1 percent, respectively.
Axiata’s XL unit in Indonesia posted quarter-on-quarter service revenue growth for the second consecutive quarter. Service revenue increased 1 percent, and total revenue rose 0.5 percent. EBITDA also expanded by 0.5 percent quarter-on-quarter, with profit after tax jumping 100 percent, due to tower sale gains.
For FY16, XL’s revenue and EBITDA were lower by 6.7 percent and 4 percent, respectively, while profit after tax jumped more than 100 percent due to forex. XL delivered FY16 total traffic and data growth of 162 percent and 30.7 percent, respectively. Data revenue accounted for 38.1 percent of total revenue.
The Philippines' Smart saw FY16 revenue, EBITDA and PAT grow by 13 percent, 12.3 percent and 19.8 percent, respectively. The number of data subscribers jumped by 25.4 percent to 3.8 million while data revenue grew by 48.6 percent as data accounted for 42.3 percent of Smart’s total revenue.
Axiata’s Sri Lanka unit Dialog posted revenue, EBITDA and PAT growth of 17.3 percent, 22.6 percent and 74.2 percent, respectively. The operator posted FY16 revenue growth for mobile, fixed and pay-TV operations at 16.7 percent, 27.6 percent and 5.3 percent, respectively. Mobile data revenue jumped 52.4 percent year-to-date, with data revenue now accounting for 23 percent of Dialog’s total mobile revenue.
Nepal’s Ncell saw its FY16 revenue, EBITDA and PAT rise 2.4 percent, 2.3 percent and 7.8 percent, respectively while data revenue grew by 70.3 percent, with data accounting for 15.9 percent of Ncell’s total revenue.
Post-merger, with the inclusion of Airtel’s 1.5 months revenue, Robi’s fourth-quarter revenue increased by 5 percent sequentially. Robi’s FY16 revenue growth was at 0.5 percent, while normalised EBITDA and normalised PAT dipped 24.2 percent and over 100 percent. FY16 data revenue grew by 38.7 percent, as data accounted for 13.4 percent of Robi’s total revenue.
Axiata also said competitive disruption in India led to YTD17 revenue growth of 3.7 percent and a 6.4 percent decline in EBITDA. PAT fell by over 100 percent as a result of higher depreciation and finance costs. Idea’s FY16 contribution to Axiata accounted for 4.6 percent of normalised Group PATAMI, recording a decrease of 82.3 percent.
At M1 Singapore, FY16 revenue, EBITDA and PAT declined by 8.3 percent, 8.7 percent and 16.1 percent. For FY16, M1 contributed 9.1 percent of normalised Group PATAMI. In total, for FY16, Idea and M1’s contribution to Axiata were MYR 304 million and MYR 29 million lower, respectively.
