Axiata registers overall double digit improvements to post revenue growth of 15 per cent and profit after tax (PAT) growth of 14.1 per cent for year-to-date 2017.

Some highlights of the earnings:Axiata Group Berhad demonstrated a strong performance for year-to-date (YTD) for the nine months of financial year 2017.

The Group registered double digit growth in all key indices as most operating companies (OpCos) performed better than market with group-wide cost optimisation programme contributing close to RM1 billion.

Total YTD revenue was up 15.0 per cent to RM18.1 billion from RM15.8 billion in the corresponding period last year from strong contribution from all the Group’s main OpCos.

Revenue growth was mainly driven by data segment with data revenue contributing 44.0 per cent of service revenue as compared to 33 per cent in YTD 2016, solidifying the Group’s data leadership position across the region.

The Group’s ongoing cost optimisation programme and improved performance by OpCos contributed to a 14.5 per cent increase in EBITDA to RM6.9 billion from RM6.0 billion for the same period in 2016.

The Group-wide programme achieved a RM960 million in savings and avoidance YTD, exceeding the target of the RM800 million for full year 2017.

YTD PAT improved by 14.1 per cent to RM1.1 billion on the back of significant EBITDA improvements and forex translation gains.

Quarter-on-quarter (QoQ) revenue for the Group improved 2.4 per cent to reach RM6.2 billion, EBITDA grew 8.9 per cent to RM2.5 billion while PAT was down 33.4 per cent to RM319.1 million, impacted by the losses at Idea and forex.

The Group’s cash balance for the nine months stood at RM6.9 billion from RM6.0 billion as compared to the corresponding year. Gross debt/EBITDA also improved from 2.6x in full year 2016 to 2.1x YTD from further debt repayments coupled with significant EBITDA improvement and forex.

ANCHOR COMPANIES PUSHES GROWTH

Celcom and XL continue to show improvements in revenue and EBITDA whilst Smart[3] maintains its overall stellar performance despite sharp increase in price competition.

Celcom’s turnaround is on track though a lot more effort is required. QoQ total revenue and service revenue grew 2.1 per cent and 1.9 per cent respectively, ahead of industry performance. Prepaid revenue improved by 3.7 per cent driven by positive traction from data leading to a higher prepaid average revenue per user (ARPU) for the quarter. At the same time, Celcom’s postpaid ARPU improved by RM2. Normalised EBITDA grew 9.3 per cent QoQ with continued cost focus and lower network cost.

XL showed positive momentum and remains very much on track of its Transformation Agenda.

On a QoQ basis, XL’s revenue growth has been ahead of the industry for three consecutive quarters. XL’s service revenue grew 5.0 per cent QoQ on the back of a 10.9 per cent higher data revenue. Data revenue at XL now outpace the decline in legacy voice revenue.

EBITDA at XL improved 10.0 per cent QoQ driven by revenue improvement and focus on cost efficiencies. Positive growth momentum for XL also continues outside-Java, riding on improved network presence and various data-based value propositions.

While the Cambodia market undergoes a sharp increase in price competition, on YTD basis, Smart maintained its overall strong performance. Revenue, EBITDA and PAT for Smart grew 9.3 per cent, 9.4 per cent and 8.9 per cent, respectively, while data revenue rose by 35.2 per cent, accounting for 51 per cent of total revenue.

South Asia Market drive Axiata's business in 2017

In South Asia, the Group’s operations continued to deliver steady performance with data making higher contributions towards revenue.

YTD revenue at Dialog'’s mobile, fixed and pay-TV operations grew 10.7 per cent, 34.6 per cent and 1.2 per cent, respectively.

Overall revenue improved 8.5 per cent on the account of strong data revenue growth as a result of higher data subscribers and data usage. Revenue growth in its fixed business was attributed to network coverage enhancement and aggressive customer reconnection drive. EBITDA for the quarter grew 15.6 per cent QoQ backed by disciplined cost initiatives.

Robi recorded a solid quarterly performance, with QoQ EBITDA margin improving 6.3 percentage points to 22.2 per cent driven by timely and excellent integration with Airtel. Robi’s service revenue improved 4.1 per cent QoQ to outperform the industry.

At the same time, subscriber and revenue market share rose to 29.3 per cent, up 0.2 percentage points and 28.0 per cent, up 0.5 percentage point respectively.

Since launching 4G in June, Ncell now offers 4G services in 19 cities in Nepal, driving data revenue growth of 15.4 per cent QoQ.

YTD data revenue grew by 17.2 per cent to account for 18.3 per cent of total revenue.

YTD core revenue and EBITDA grew 7.2 per cent and 18.8 per cent respectively while core EBITDA margin increased by 5.1 percentage points to 52.1 per cent from cost initiatives.

Axiata's new businesses and associates

Edotco recorded sustained growth from expansion of its portfolio and higher tenancy ratio. YTD basis, edotco accounted for about 6 per cent and 7 per cent of group revenue and EBITDA respectively.

Driven by higher tenancy across all its operating countries and the maiden contribution from its Pakistan operations, edotco recorded revenue growth of almost 10 per cent YoY.

Its YoY tenancy ratio rose to 1.5x from 1.4x.

In August, edotco announce its biggest expansion plan with the proposed acquisition of Deodar Private Limited to obtain approximately 13,000 more towers in Pakistan.

Upon completion, edotco will be the 8th largest independent tower company globally with close to 40,000 sites in its total portfolio.

Axiata Digital with its portfolio digital companies and business units is now focused on a few strategic verticals and monetising its assets. Its Digital Financial Services (DFS) portfolio continues to build its presence and ecosystem and has been improving on its contribution to the group’s core business.

Continued disruption in the Indian mobile industry led to Idea [9] registering a negative contribution of RM156.4 million for the quarter while M1 contributed a profit of RM30.0 million to the group.

Competition to remain stiff for the telco industry

The telecommunications industry will continue to be faced with stiff competition. Axiata’s Chairman, Tan Sri Azman Mokhtar said “our markets continue to face strong competition and regulatory uncertainties ... The Board acknowledges the progress made in the Group’s ongoing cost optimisation programme and operational turnaround of Celcom and XL".

Tan Sri Jamaludin Ibrahim, President & Group Chief Executive Officer of Axiata said, “The group has achieved a few significant milestones to record strong double digit growth on all key financial indicators.

Jamaluddin encouraged by the quarter on quarter improvements, but is focused on improving other comapanies' operations.

He says that "XL has been successfully executing on its transformation strategies and our other mobile OpCos remained on a strong growth course. Edotco’s sustained performance and drive for operational efficiencies are starting to significantly contribute to the Group’s financial performance.

Cost management is key moving forward

Axiata will continue to manage challenges in international markets.

Jamaludin concludes “as we continue to be impacted by the challenges in India, we remain focused on driving improvements at Celcom and XL, and continue with our successes in strong execution in all our other markets".

He also says that the group's cost optimisation initiatives will continue to be central to their operations. He added that "our group-wide cost optimisation programme had surpassed our full year goal within the first nine months to achieve RM160 million above target and deliver of RM960 million in cost savings and avoidance".