Axiata Group Berhad (Axiata), the parent company of Celcom Axiata Bhd announced its Quarter 4, 2016 (4Q16) financial results last week.
As of 2016, Celcom Axiata has 10.56 million mobile subscribers. It had 12.25 million subscribers at the end of 2015. The Telco lost 1.69 million mobile subscribers in 2016 including some 598k subscribers in 4Q16 alone (11.15 million subscribers in 3Q16).
Out of the 10.56 million mobile subscribers (4Q16), 7.6 million are prepaid users while 2.96 million are using postpaid.
The ARPU for Prepaid was RM31 while the ARPU for Postpaid was RM80 in 4Q16.
According to Axiata, 61.9% of of Celcom subscribers are data users while 64% are smartphone users. In 4Q16, Celcom subscribers consumed an average 3.9GB a month. For 2016, average data consumption per subscriber was 3.1GB a month.
Celcom’s latest 4G LTE population coverage now stands at 76% nationwide.
Commenting on Celcom’s performance, Axiata said, “Positive take-up on enhanced postpaid offerings such as First Gold 80 and First Platinum, delivered higher ARPU of 4.1% and subscribers growth of 3.2% QoQ. However, its prepaid segment continues to face near term challenges. Data revenue continues to be driver for Celcom, increasing by 10.0% in FY16 driven by mobile internet revenue growth of 19.0%. Data revenue accounted for 34.1% of total revenue.
“Notwithstanding the improvements in the final two quarters, FY16 performance at Celcom was lower with revenue, normalised EBITDA and normalised PATAMI declining by 9.8%, 17.6% and 29.1% respectively. Higher D&A charges from accelerated 4G rollout impacted Celcom’s bottom-line.”
FY16, Axiata Group posted a healthy revenue growth of 8.5% to RM21.6 billion compared to RM19.9 billion in the previous year (FY15) mainly from positive fourth quarter contributions across most of the Axiata operating companies (OpCos).
At the same time, EBITDA (earnings before interest, tax, depreciation and amortisation) increased by 10.0% to RM8.0 billion and margin improved by 0.6 percentage points to 37.2% for the year on the back of higher revenue.
Axiata’s profit after tax (PAT), however, was impacted by three significant factors; i) unprecedented external events ii) strategic investments for long term growth including merger and acquisition (M&A) related costs which were mostly one-offs and iii) Underperformance of some OpCos and Associates.
PAT was recorded at RM657 million as compared to RM2.6 billion at FY15. FY16 normalised PAT, excluding one-off charges and reflecting operations only, would be RM1.5 billion.
Tan Sri Jamaludin Ibrahim, President & Group Chief Executive Officer of Axiata said, “2016 was especially an extremely tough year for the Group with a combination of external and some internal challenges. Despite our topline revenue and EBITDA showing stronger performance, profitability was below our expectation. We are naturally dissatisfied with the performance of some of our companies but are pleased that most others have done very well. Some indicators improved in the final months of 2016 with Celcom and XL showing early signs of stabilising.
“The reasons for the drop in Group’s profitability were the Ringgit depreciation against the US Dollar causing substantial forex losses on borrowings and payment related to the Ncell acquisition; the aggressive competition in India resulting in considerably lower contribution from our historically strong performing Associate; our strategic investments and M&As in Bangladesh and Nepal leading to some one-off merger and finance costs; our continued capex investments for data leadership booking higher D&A and accelerated depreciation; and lastly, start-up investments in digital/ Internet ventures.”
Jamaludin added: “For 2017, heightened competition and tax and regulatory challenges remain for the Group across most of our OpCos particularly in Malaysia, Singapore and India, with rising capex weighing in on overall performance and profitability. We hope to see currency volatility and global macroeconomic factors which had an overarching impact on profitability for FY16, start to stabilise in 2017.
“We are committed to make 2017 one of our best years. With all the major business and organisational changes made recently, we expect to see better performance especially at Celcom and XL. In South Asia, barring regulatory changes, we are also confident our OpCos will continue its momentum of excellent performance particularly at Robi post-merger and Ncell. Further edotco organic and inorganic growth is expected in 2017. We are working to reduce cost and improve our Group-wide cost management plans we are working to reduce cost and or improve Group profitability. Axiata will also further continue its investments in its transformation into a digital company. We hope to see further consolidation in most of our markets.
“We have built in RM800 million opex and capex savings in our 2017 plan, and we are working towards RM1.5 billion additional savings in 2018 and 2019. This should be reflected in improved margin in 2018 and beyond.
“For 2017, the Group has committed to be the clear No.1 in 4G and data leadership in selected key markets as well as lead in the digital space.”
Axiata declared a final dividend of 3 sen per share, bringing the total dividend to 8 sen.
