YEAR-TO-DATE PERFORMANCE

Continued momentum was seen in the quarter with the Group, recording excellent revenue of RM13.2 billion, representing a 9% YTD growth despite FOREX fluctuations and softening markets. At constant currency, revenue was up 12%. The excellent performance was on the back of robust data business in Malaysia and Indonesia and higher active subscribers and usage in Sri Lanka and Bangladesh. EBITDA also grew 5%, 8% at constant currency, driven by higher voice and data mainly at Celcom3. EBITDA margins dipped marginally by 1.5% in the same period partly due to higher costs at XL4 incurred to support network expansion for data, as well as a change in revenue mix.

Underlying Profit after Tax (“PAT”), adjusting for normalised items, was RM2.5 billion, a solid 8% growth, mainly from higher contributions from Celcom, and on the back of continued operational improvements across the main OpCos. At constant currency, increase would have been higher at 10%. Actual PAT, was up by 7% at RM2.2 billion.

Axiata ended the quarter in a strong financial position, cash position now at RM8.6 billion vs RM6.8 billion a year ago. This enhanced balance sheet provides the Group flexibility for future organic growth and potential consolidation in various markets.

Strong growth was seen in regional mobile subscribers with a 14% increase YTD to 213 million, despite softening of key markets.

On 31 October 2012, Axiata paid an interim dividend (tax exempt under single-tier system) of 8 sen per share equivalent to a total payout of RM681 million to its shareholders.

Financial Snapshot

	YTD Amount  (RM ‘million)	YTD (%)	YTD Constant Currency (%)	YoY (%)	YoY Constant Currency(%)
Revenue	13,228	9	12	8	13
EBITDA	5,575	5	8	2	6
PBT	2,889	0.4	3	0.9	4
PAT	2,222	7	9	19	24
Normalised PAT	2,454	8%	10%	4%	8%
PATAMI	1,942	8	10	20	25
Normalised PATAMI	2,132	9	11	7	11

 

 

DATA LEADS GROWTH AT CELCOM AND XL

 

Malaysia

Celcom saw excellent overall performance, outperforming the market in most key financial indicators. Revenue touched RM5.8 billion, the highest ever, a growth of 8% YTD, driven primarily by the higher take up of data subscription. EBITDA in the period grew by 6% with EBITDA margin at 44.9%. Higher revenue, alongside diligent focus on cost management, resulted in excellent improvement in profitability at RM1.7 billion, a growth of 15%. Core business remained stable, breaking global industry trends, on the back of Celcom's focus on voice resuscitation which saw a 5% YTD increase. Total subscribers in the period was 12.4 million.

Growth in non-voice services remained strong. Data revenue forged ahead now contributing 12% to revenue, a hike of 19% YTD, supported by increased usage and encouraging take up of smartphones and tablets. Data subscribers surpassed the 1 million mark, a rise of 9% YTD. With focus remaining on data for future growth, Celcom will continue to prioritise this segment via enhancements and innovative data services and applications. With this in mind Celcom has been preparing itself and is ready for the launch of LTE which is the next evolution in mobile broadband technology to ensure, amongst other things, ubiquitous and seamless data connectivity across networks.

Indonesia

XL saw robust growth in overall revenue segments driven by data, the fastest growing segment. Revenue increased by 14% YTD to IDR16 trillion with data as the highest growth contributor at 60%, followed by SMS at 21% and Voice at 7%. EBITDA grew by 6%, with EBITDA margin at 47%, in the same period.

Data traction remained strong, evident in the continuous increase in data revenue, traffic as well as data subscribers which reached 25 million or 60% of total base. Data revenue contribution has also increased from 14% last year to 19% this year. XL remains focused on delivering improved data access and experience, with more than 10,000 Node Bs built to date.

XL's ongoing efforts in mitigating the decline in Voice continued to show encouraging results with an increase in Voice revenue of 7% YTD. In tandem SMS revenue grew by 21% in the same period.

 

CONTINUED MOMENTUM AND GROWTH IN SOUTH ASIAN OPERATIONS

 

Sri Lanka

Dialog5 continued its positive performance trend of recent quarters to record consolidated revenue of SLR41.5 billion for the nine months ending 30th September 2012, demonstrating a significant growth of 24% YTD. EBITDA in the period grew a significant 21% at SLR14.2 billion. Similarly, PAT saw a tremendous improvement of 43% at SLR5.1 billion.

Aggressive investments continued in order to consolidate Dialog's leadership in terms of nationwide ICT infrastructure footprint, and the application of cutting edge technology across its mobile, fixed and broadband businesses. CAPEX was directed in the main towards strategic investments in High Speed Mobile Broadband and Optical Fibre Network (OFN) expansion projects, further strengthening Dialog's coverage and quality leadership position through the upgrade of its high speed broadband infrastructure.

Notwithstanding the significant 56% YTD growth in CAPEX, Dialog recorded positive Free Cash Flows (FCF) of SLR3.8 billion for the 1st nine months of 2012 on the back of strong EBITDA performance. In line with the generation of healthy free cash flows, Dialog continued to maintain a structurally robust balance sheet with Net Debt to EBITDA ratio improving from 0.86x to 0.77x YTD.

Bangladesh

Bangladesh, one of the Group's fastest growing markets, showed sustained growth momentum despite competitive pressures. Robi6 continued to post double digit numbers for both revenue and EBITDA, 28% and 41% respectively on a YTD basis. Healthy revenue growth was mainly on the back of aggressive subscriber growth. Similarly, PAT was up 3% in the period.

Amidst intensifying market competition, Robi continued to grow subscriber base with a strong 42% YTD increase.

 

REGIONAL AFFILIATES

 

India

Idea saw very strong double digit growth across all financial metrics despite hyper-competition. On a YTD basis, Revenue and EBITDA were up by 18% and 20% respectively. Similarly, PAT was up an impressive 68% in the same period.

Idea's 3G investment plans are on track with high speed broadband services now available in 3,500 towns in the 20 service areas.

A 15% YTD growth was seen in its subscriber base now exceeding 100 million.

Singapore

M1 achieved another milestone in the quarter as the first operator in South East Asia to launch nationwide 4G service. At the same time, new smartphone and mobile broadband plans with tiered data bundles were introduced which saw very strong take-up of 4G handsets. M1 continued its steady increase in customer base, despite the highly saturated market, adding 24,000 customers, bringing the total mobile customer base to over 2 million.

Service revenue grew 2.8% to SGD577.4 million, driven by growth in customer base and higher contribution from fixed services. Net profit after tax decreased 14% due to higher handset subsidies. Free cash flow increased 46.5% year-on-year to SGD169.0 million.

Revenue from non-voice services rose 2.1 percentage points to 38% of service revenue, driven by continued growth in smartphone customer base. This now accounts for 73% of total postpaid customer base.

 

COMMENTARY

Axiata Chairman, Tan Sri Dato' Azman Hj. Mokhtar, noted “The Group continues to record healthy revenue increases. I am particularly happy to see Axiata's Malaysian flagship, Celcom, maintaining strong top line growth despite a saturated market, and our other businesses also continuing to show excellent progress. We will strengthen our resilience by focusing on fundamentals and our long term objectives of ensuring strong profits, whilst looking for more growth and revenue enhancing opportunities”.

Dato' Sri Jamaludin Ibrahim, President and Group Chief Executive Officer of Axiata added “Positive momentum continues across almost all OpCos in the third quarter. The Group posted another solid quarterly performance, underpinned by continued strong growth across our operating companies. Overall, our top line grew very well and I am especially pleased to see that the Group's YTD revenue is showing double digit growth at constant currency. Data growth remains strong, Celcom and XL in particular continuing to see good traction in the segment. To support growth opportunities in data, we are embarking on several initiatives which include investment in data network as well as our IT transformation across the Group. Significant increase in data revenue, which has changed the revenue mix, has had an impact on margins but we are confident of success in the longer term.

Our momentum is strong going into the last quarter of the financial year. Despite FOREX fluctuations and slowing growth in traditional businesses, we are confident about our prospects for the rest of the year and of meeting our full year targets based on the three quarters of growth we have steadily and consistently achieved”, concluded Dato' Sri Jamaludin.

 

ABOUT AXIATA

Axiata is one of the largest Asian telecommunication companies. Axiata has controlling interests in mobile operators in Malaysia, Indonesia, Sri Lanka, Bangladesh and Cambodia with significant strategic stakes in India and Singapore. India represents one of the fastest growing markets in the world. In addition, the Malaysian-grown holding company has a stake in mobile telecommunication operations in Thailand.

The Group's mobile subsidiaries and associates operate under the brand name ‘Celcom' in Malaysia, ‘XL' in Indonesia, ‘Dialog' in Sri Lanka, ‘Robi' in Bangladesh, ‘HELLO' in Cambodia, ‘Idea' in India and ‘M1' in Singapore.

The Group's, including its subsidiaries and associates, has over 210 million mobile subscribers in Asia. The Group revenue for 2011 was USD5.4 billion. The Group provides employment to over 20,000 people across Asia. Axiata's vision is to be a regional champion by 2015 by piecing together the best throughout the region in connectivity, technology and talent, uniting them towards a single goal: Advancing Asia.

Axiata was awarded the Frost & Sullivan 2009, 2010, 2011 and 2012 Asia Pacific ICT Award for Best Telecom Group and the Telecom Asia Best Regional Mobile Group 2010 and 2011 for its operations in multiple Asian markets.

-ENDS-