President and group CEO of Axiata Group Tan Sri Jamaludin Ibrahim at the media briefing. File Photo/THE STAR (MALAYSIA)
Malaysia-based Axiata Group Bhd, which operates telecommunications businesses in several Asian countries, said most of its operating companies (OpCos) have seen revenue recovering to pre-pandemic levels in June after a weak start in the second quarter of this year.
But despite the rebound, the group in a statement said it expects to record “a low” single-digit percentage decline in revenue, as well as earnings before interest, taxes, depreciation and amortisation (Ebitda) this year.
The company said net profit in the three months ended June 30 declined to 80 million ringgit ($19.2 million) compared with 220 million ringgit a year ago.
Revenue fell to 5.8 billion ringgit from 6.15 billion previously.
However, Ebitda rose 3.2 per cent to 2.6 billion ringgit in the second quarter due to lower advertisement and promotion expenses and one-off staff restructuring costs in the first quarter, among others.
The group has declared an interim dividend of two sen (0.48 US cents) a share, compared with a payout of five sen a share made a year ago.
President and group CEO Jamaludin Ibrahim said: “The full impact of Covid-19 was felt heavily in the second quarter, especially in April when movement restrictions were in full throttle across our markets.”
However, the gradual easing of movement controls in most markets contributed to the recovery.
Jamaludin said: “By June, most OpCos had largely recovered to pre-lockdown revenue levels.”
The group said that the pandemic had resulted in an estimated 400 million ringgit revenue loss during the first half of this year.
This was mainly from distribution shutdowns and outlet closures during the stringent movement control order period that prevented subscribers from accessing prepaid reloads, as well as the provision of free data and bonus recharge.
Axiata said: “Efforts were focused on ensuring connectivity for frontliners as well as other protection and prevention initiatives, including contributions to national disaster recovery efforts in Malaysia, Indonesia, Cambodia, Sri Lanka, Bangladesh and Nepal.”
Concessions were also made by OpCos to provide flexibilities in payment to cater to subscribers impacted by the pandemic.
Jamaludin said: “Against this backdrop, we are encouraged that our cash position remains strong, and we continue to be ahead of our five billion ringgit cost-optimisation target by one year, as evidenced from the Ebitda margin improvement.”
As of June, Axiata’s cash in hand stood at 5.9 billion ringgit.
Free cash flow grew 4.3 per cent year-to-date to 2.5 billion ringgit mainly due to a 3.8 per cent cut in capital expenditure, while operating free cash flow jumped 17.2 per cent to 1.2 billion ringgit arising from lower capital expenditure and tax.
The group’s liquidity position was reinforced last month with the issuance of a dual-tranche offering comprising a 10-year $500 million sukuk, or Islamic bond, and 30-year $1 billion euro medium-term notes.
THE STAR (MALAYSIA)/ASIA NEWS NETWORK
