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Smart Axiata posts $67M in profit

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Cambodian mobile operator Smart Axiata posted a net profit of $67.6 million last year. Heng Chivoan

Smart Axiata posts $67M in profit

Cambodian mobile operator Smart Axiata posted a net profit of $67.6 million last year, a slight drop from 2017 and down to what the firm said were unfavourable forex conversions.

Smart Axiata’s net profit in 2017 was $68.1 million.

According to a Smart Axiata statement provided to The Post on Tuesday, the firm’s revenue last year grew seven per cent to $287.5 million, while its “ebitda” – earnings before interest, tax, depreciation and amortisation – increased six per cent to $134.8 million.

However, the subsidiary of Malaysian’s Axiata Group posted a decline in net profit as it converted its financial performance results in Cambodia to a parent company report in Malaysian ringgit.

“In absolute terms, that is, in USD currency, Smart again outperformed its peers by achieving positive year-on-year growth despite having to face intense industry competition,” the statement read.

It added that the firm’s 2018 revenue increase was fuelled by 28 per cent data growth, with data accounting for 60 per cent of total revenue.

“Although several challenges related to the regulatory environment and market price elasticity are concerns for the Cambodian telecommunications market, Smart remains cautiously optimistic about the company’s financial performance for the coming year.”

Smart plans to earmark approximately $80 million in capital expenditures this year for network expansions and enabling advanced mobile technologies. It expects to further strengthen its mobile data leadership while introducing new digital, entertainment and lifestyle offerings to millions of Cambodians.

In July last year, Axiata Group sold a 10 per cent stake in Smart Axiata to Japanese group Mitsui Co Ltd for a second time. The Japanese firm holds 20 per cent of Smart Axiata, while Axiata Group still has the majority interest at 72.5 per cent. The remaining 7.5 per cent is owned by Southern Coast Ventures.

According to an Axiata Group report, the company paid $16.9 million in profit tax last year.

Telecommunication Regulator of Cambodia spokesperson Im Vutha said the Kingdom’s telecom sector is growing, with revenue continuing to increase despite greater competition in the industry.

He added that the success of Cambodia’s telecom operators have contributed to government revenue through taxes, annual licensing fees and other non-tax revenue.

“Future economic trends will be digitally based, so we believe that telecom companies will use more of their profit to invest in infrastructure and will be more helpful in boosting the local economy,” he said.

He added that industry growth is not only beneficial to the Kingdom in government revenue, but also helps boost other sectors, such as education and business.

According to Ministry of Post and Telecommunications figures released last month, the number of registered SIM cards provided to the Kingdom’s mobile operators reached 19.3 million by the end of last year, a nearly four per cent increase from the end of 2017.

The figure is equivalent to 120 per cent of Cambodia’s total population of more than 16 million.

Last week, Vietnamese military telecom firm Metfone celebrated 10 years of operating in Cambodia and posted an accumulated revenue of more than $2.2 billion during its nine years in the Kingdom, with an accumulated profit reaching $300 million.

The firm also reported that it has contributed an accumulated $500 million in taxes to the Cambodian government.

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