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Jakarta, Indonesia – Axiata Group Bhd is to spend a hefty RM4.8bil to mainly strengthen its data segment services and offerings this year. The company has been reported to have 3.4% year-on-year growth in net profit to RM595mil for its final quarter ended Dec 31, 2014.
The regional telecommunications player, with a market capitalization of RM61.5bil, said the RM4.8bil was one of its highest annual capital expenditures to-date. It spent RM4.1bil out of the RM4.4bil allocated last year.
Reviews say the reason for this big jump is that Axiata is planning to go big on data services and offering. Related investments may include more base stations, fibre-optic improvement, upgrade of IPs (Internet protocols) and core networks in most countries it was operating in.
The group said that “competition among players is expected to become more intense” with the advent of 4G network.
It also has affiliates in India and Singapore. It also formed an integrated telco infrastructure services firm edotco Malaysia Sdn Bhd less than a year ago.
Celcom’s overall data revenue grew 24.2% last year and it has a capital expenditure of RM1.1bil this year.
Meanwhile, Axiata plans to spend RM1.8bil for XL, RM500mil for Robi and RM300mil for Smart.
Jamaludin explained that Axiata would try to reduce cost which might result in Axiata spending less than its allocation.
On its latest quarterly results, Axiata attributed the 3.4% growth in its fourth-quarter net profit to higher earnings recorded by its Bangladesh, Sri Lanka and Cambodia operations and associate company in India.
It said profit from its Malaysia operations decreased due to lower earnings before interest, tax, depreciation and amortization (EBITDA) and higher taxation, while Indonesia registered lower profits due to Axis consolidation, which was partly offset by a gain of RM71.4mil from its disposal of XL towers in the final quarter.
Despite to the profit decrease, the current state of Axiata shows that they are in the right track and will continue to stay at the top with their sister companies across Asia.
Group revenue increased 6.7% to RM4.8bil during the quarter on the back of higher revenue from all key operating companies except Malaysia.
On a yearly basis, its 2014 net profit was marginally lower at RM2.35bil against RM2.55bil last year – despite higher revenue of RM18.7bil – due to higher operating costs of RM11.7bil.
“This is mainly due to Axis’ integration in Indonesia. As a result, group EBITDA declined 3.7% to RM6.99bil and its margin declined by 2.2 percentage points to 37.4%,” explained Jamaludin.
