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Mixed Q1 messages from Axiata

Modest revenue and EBITDA growth, "limited impact" so far from COVID-19, some pesky forex losses, and the withdrawal of 2020 "headline KPIs" because of pandemic-induced uncertainty.

These were some of the main takeaways from Q1 results presented by Axiata, a Malaysian telecoms group which – aside from Celcom on its home turf – has mobile operations in Bangladesh, Cambodia, Indonesia, Nepal and Sri Lanka.

Reported Group revenue was up 1.5%, year-on-year, to a shade over six billion Malaysian ringgit (US$1.4 billion). EBITDA rose 3.4% over the same period, to MYR2.5 billion ($573 million).

Net income, which Axiata appears to call PATAMI (group profit after tax and minority interests), slumped 74% to MYR118 million ($27 million).

Axiata blamed the PATAMI slice on a strengthening US dollar compared to local currencies, a Celcom employee restructuring program and a lower contribution from Ncell (its operation in Nepal).

Reassuringly, free cash-flow was up 25.6%, to MYR1.2 billion ($275 million), buoyed by EBITDA growth and lower capex.

Apart from Indonesia and Cambodia, Axiata said COVID-19 only started to make an impact on its markets during the second half of March when strict lockdown measures came into play. It suggests that Q2 will be a bumpier ride in terms of sales.

Axiata flagged the "sustained strong performance" at XL (Indonesia) and Robi (Sri Lanka). Each managed high single-digit revenue growth.

Celcom, which saw Q1 service revenue decline 7%, to MYR1.3 billion ($298 million) was apparently impacted by product launch delays.

While encouraged by XL and Robi, Tan Sri Jamaludin Ibrahim, Axiata CEO, conceded "we could have done better at Celcom."

He added that Ncell was "still challenged" and was competing with both mobile and ISP players "without the badly-needed spectrum."

— Ken Wieland, contributing editor, special to Light Reading

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