Axiata Q3 profits double, cost savings eyed

KUALA LUMPUR, MALAYSIA: Malaysia's No. 2 mobile phone service provider Axiata Group Bhd saw third-quarter net profit more than double from a year ago, boosted by solid revenue growth at its regional units.

Axiata's Indonesian unit PT Excelcomindo Pratama (XL) and Sri Lankan unit Dialog Telekom DIAL.CM, performed strongly, while its Malaysian operations under Celcom benefited from solid growth in the wireless broadband market.

"The group has seen an acceleration of performance on the back of increased focus on operations and diligent execution of strategies across all operating companies," Axiata said in a statement on Monday.

"This has been further aided by the steadying rebound seen in regional economies the group operates in. That said, volatility and increasing competition still remains an issue."

Axiata, which also owns a stake in Indian telecom firm Idea Cellular Ltd, earned a net profit of 503.7 million ringgit ($148.9 million) in July-September, against 243.9 million ringgit a year earlier.

The state-controlled company's third-quarter net profit accounts for about 40 per cent of analysts' net profit forecast of 1.25 billion ringgit for the full year.

"For the rest of the year, the group will continue to focus on revenue growth but with a prudent approach, emphasising cost management," it said in a filing with the stock exchange.

Axiata, valued at $7.7 billion, competes with bigger rival Maxis Bhd in a saturated domestic telecoms market.

Malaysia is currently the second-most developed mobile market in Southeast Asia, behind Singapore.

The Malaysian mobile market will grow modestly over the next few years, with growth coming primarily from customers with multiple subscriptions, according to research firm Frost & Sullivan.

Eight out of 22 analysts tracked by Thomson Reuters I/B/E/S have either a "sell" or "underperform" call on Axiata, with seven calling it a "hold" and another seven seeing it as a "buy" or "strong buy".

Axiata shares have gained 25 per cent this year, lagging the 44 per cent rise in the wider market index.