AXIATA POSTS RM365 MLN NET PROFIT FOR FY20

KUALA LUMPUR, Feb 25 -- Axiata Group Bhd's net profit narrowed to RM365.15 million in the financial year ended Dec 31, 2020 (FY20) from RM1.46 billion a year earlier.

Revenue was marginally lower at RM24.2 billion from RM24.58 billion previously, mainly due to the impact from the COVID-19 pandemic-related lockdowns, which posed distribution challenges and affordability in operating markets, it said in a filing with Bursa Malaysia today.

It said the group was also impacted by the accelerated depreciation and write-off of assets -- mainly for 3G assets -- amounting to RM821.2 million, as well as lower one-off gains.

At a virtual briefing on Axiata's financial performance for FY20 today, president and group chief executive officer Datuk Izzadin Idris said the challenges would remain in FY21, with headline key performance indicators of low single-digit growth for both revenue and earnings before interest, taxes, depreciation and amortisation (EBITDA) for the year. 

“We ought to be open about it. At the beginning of the first quarter of last year, we thought 2020 was going to be disastrous, but, as it turns out, we are okay with the RM865 million underlying PATAMI (profit after tax and minority interests)

“At worst, given the improvements in the situation and notwithstanding the challenges, I think we should be able to sustain the performance,” he said.

For FY20, he said Axiata's underlying PATAMI decreased 9.4 per cent to RM865 million, mainly impacted by higher depreciation and amortisation, lower contribution from Ncell and edotco, and higher marketing spend at Axiata Digital (Boost) in support of the government’s drive for e-wallet adoption.

He said as part of efforts to improve network resilience and efficiency, a group-wide 3G shutdown initiative was carried out in FY20 to support the deployment of the more efficient 4G technology, while addressing increased digital and data demands from customers across the Axiata footprint. 

Izzadin said the accelerated depreciation of 3G assets, coupled with lower one-off gains from the disposal of M1 and Idea rights, as well as divestment of non-core digital businesses in FY19 affected the PATAMI, which dropped to RM365.2 million in FY20.   

Nevertheless, he said Axiata’s balance sheet remained anchored on a strong footing at the close of the year, with a high cash balance of RM7.2 billion and gross debt-to-EBITDA ratio at 2.57 times, strengthening its position to weather continued economic and pandemic uncertainties expected in 2021. 

He added that optimal capital expenditure (capex) spending for FY20 lifted operating’s free cash flow by a healthy 73.1 per cent to RM3.3 billion.

Izzadin said the company is cognisant that its operating markets are not out of the woods yet, despite the anticipated recovery aided by global vaccination efforts.

He said Axiata’s board remains cautious of prevailing uncertainties, but is confident that long-term increased payout remained intact.

As such, the board has declared a full-year total dividend of seven sen per ordinary share, including the interim dividend of two sen per ordinary share for the financial period ended June 30, 2020.

For FY21, Izzadin said the group has allocated a capex of RM6.5 billion, which would be sufficient based on the assessment of projected demand for 2021 in terms of network capacity.

“We will continue to monitor that and make appropriate revisions,” he said.

The group would also focus on cost management and optimisation of operational excellence as part of Axiata 5.0. 

He added that Axiata would focus on conserving cash in FY21, mainly via capex efficiencies and disciplined efforts to manage its costs across the group, while also taking steps to build a war chest for new normal growth opportunities.

-- BERNAMA