KUALA LUMPUR, Feb 22 — Axiata Group Bhd plans to sustain its 2021 strong performance by targeting mid-single digit revenue growth and high single digit for earnings before interest and taxes (EBIT) growth and is allocating RM7.1 billion in capital expenditure (capex) to support the growth.
President and group chief executive officer Datuk Izzaddin Idris said this would continue to be driven by the largest part of its business that is the mobile segment which contributed about 85 per cent of profit and revenue.
“Therefore capex would also be directed towards investment in this segment. The bulk of the allocation would focus on improving Axiata’s mobile network service quality,” he told reporters during the financial year 2021 virtual result briefing today.
Group chief financial officer Vivek Sood said the group also saw vast growth opportunity in markets like Bangladesh and Indonesia and would continue to accelerate its investment in these markets as there was good prospect on expanding the group’s footprint in the markets.
“This is due to the low penetration rate in the high populations of 280 million and 155 million respectively in these market. Once the PT Link Net Tbk acquisition is completed, there will be some capex earmarked for it.
“For edotco Group Sdn Bhd, there would also be an allocation of around RM1 billion in March linked to new towers in the key market,” he shared.
In the financial year ended Dec 31, 2021 (FY2021) the group saw its net profit jumped to RM818.90 million from RM365.16 million a year ago while revenue rose 7.0 per cent to RM25.90 billion from RM24.20 billion previously, with growth across all operating companies except mobile operations in Nepal.
The group also achieved cost excellence through operational expenditure and capital expenditure savings of RM696 million and RM1.3 billion respectively, totalling RM2.0 billion.
Izzaddin said the group is targeting to pay dividends of 20 sen per share by 2024.
“The business is capital intensive and we need to continue investing. We have made operational improvement and saved RM696 million in 2021. The challenge now is to record better improvement in performance and that is the only way to pay the dividend we are targeting,” he said.
Commenting on the debt level, he said the group’s debt level went up by RM1.4 billion as at December 2021 due to acquisition of Malaysian tower operator Touch Mindscape, with the gross gearing level at RM19 billion.
He said the group had planned to pare down debt by raising US$1 billion and US$500 million worth of bonds for 10 years and 13 years maturity period.
“Our average age of debt is 8.9 years with 37 per cent maturing in 2022 and 2023. The good news is that most of it are working capital and revolving credit in nature and that would get refinancing as we go along.
“As far as we are concerned, we are comfortable with the debt level today,” he said.
Asked on the potential listing of edotco and Boost, Izzaddin said it would depend on the market condition and state of readiness for listing.
For edotco, he said as long as Myanmar is part of the portfolio, there is a bit of a challenge to list as there is the need to tackle the fundamental issue such as to have a good investor base, good and sustainable valuation.
As for Boost, he said the value will certainly be enhanced if Axiata secures the digital bank licence which would allow them to launch the digital bank.
“This would take some time. Should the government decide in March, it would take 6 to 9 months to launch the bank, so it is unlikely to be this year.
On another note, he said the group had received several proposals for special purpose acquisition company (SPAC) listing for Boost and edotco, however the group is in no rush for listing.
Meanwhile, on the completion of the merger between Celcom and Digi, Izzaddin said the group is hopeful that the Malaysian Communications and Multimedia Commission (MCMC) can complete its evaluation in due course.
He said there has been several engagements between MCMC, Celcom and Digi to make sure that all their concerns are addressed and so far the merger is still in progress.
“We have assembled a team of about 85 personnel from Digi and Celcom and they have been working on the integration plans,” he added. — Bernama
