XL’s transformation agenda is on track and
continues to gain momentum with clear
improvements over the last three consecutive
quarters of 2015 in revenue, EBITDA, EBITDA
margin and Average Revenue Per User
(ARPU). By the fourth quarter of 2015, XL
delivered its third sequential quarter of growth
with revenue up 2.0%, EBITDA improvement
of 5.6% and EBITDA margin increase of 1.3
pp. Data remains a key revenue driver with
data revenue growing 13.8%. Post the Axis
USD865 million acquisition, under its balance
sheet management initiatives, XL reduced its
gross debt to EBITDA ratio from 3.4x at the
start of the year to 3.2x at the end 2015. At
the same time XL also completely reduced its
unhedged external USD debts by end 2015.
With the potential second tranche of tower
sale and Rights Issue in the first half of 2016,
XL expects the debt to EBITDA ratio to come
down below 2.5x.
Stellar performance in all metrics was seen
at Dialog despite regulatory challenges and
tax impositions. Strong performance was
recorded in revenue, EBITDA and normalised
PAT
6
for the financial year ended 2015 which
saw an increase of 10.0%, 14.2% and 29.0%,
respectively. Outstanding performance at
Dialog was due to strong revenue growth in
its mobile, fixed and TV businesses, growing
9.7%, 12.9% and 22.6% respectively.
Performance at Robi was moderated due
to heightened price competition in the
Bangladesh market. Nevertheless, Robi
increased its subscriber base by 12.0% Year
on Year (YoY) to close 2015 with 28.3 million
customers as it focused on data leadership
through device sales and co-branding.
Revenue and normalised EBITDA for 2015
grew a healthy 6.0% and 4.4% respectively,
while normalised Profit After Tax (PAT)
dropped by 8.6% primarily due to higher
depreciation arising from capital expenditure
as well as impairment losses.
Smart continued with yet another year of
outstanding performance with 2015 revenue,
EBITDA and PAT increasing significantly.
Mobile data revenue grew by 86.2%, along
with a 7.3% improvement in voice. With
accelerated 4G LTE rollouts, data revenue
now contributes 32.3% to total revenue.
Smart’s total data subscribers grew an
impressive 71.4% YoY to close the year at
three million customers of its now 7.6 million
strong subscriber base.
Regional affiliates also continued with strong
PATAMI contributions. Idea reported an all-
round strong performance with year to date
(YTD) revenue, EBITDA and PAT growth of
14.5%, 21.5% and 11.2% respectively. YTD
Idea has contributed RM368.8 million to
Group PATAMI, an increase of 51.6% over last
year. M1 ended the financial year 2015 on a
strong note with revenue, EBITDA and PAT
growth of 7.5%, 1.9% and 1.5% respectively. M1
contributed RM157.8 million to Group PATAMI,
an increase of 8.6% over last year.
RESHAPING THE FUTURE
In 2015, we delivered five key initiatives, as
we continue setting the ground work for the
Group’s journey towards reshaping itself as a
New Generation Telco.
1) In-Country Consolidation in
Bangladesh
Our focus for inorganic activities have
centred on in-country consolidation within
our existing footprint, as one of the Group’s
key approaches in solidifying its position,
unlocking profitability of the market and
ensuring long-term growth. In recent years,
we have strengthened our existing operations
through in-country mergers and acquisitions
(M&A) exercises in our markets such as the
two small ones in 2013 in Sri Lanka between
Dialog and Suntel and later Sky Television and
Radio, a medium-sized operation in Cambodia
with Smart and Hello in the same year and
more recently in Indonesia in 2014 between
XL and Axis.
“
Largely, our OpCos showed amix of steady, and for some, stellar operational performance
with regional affiliates continuing to contribute strongly towards Group PATAMI.
”
Continuing with this approach in 2015,
Axiata has entered into an agreement
with Bharti Airtel Limited to merge our
respective telecommunication subsidiaries in
Bangladesh; namely Robi Axiata Limited and
Airtel Bangladesh Limited (Airtel), making
it from a marginally second largest player
to a significant second largest player in a
competitive six player market prior to the
merger. Post-merger, the combined entity
operating as Robi will serve approximately 40
million customers.
2) New Strategic Mobile Footprint in
South Asia
The most significant development for the
Group in 2015 was the proposed acquisition
of Ncell Private Limited (Ncell) in Nepal.
Axiata will be entering the fast-growing
brownfield market of Nepal with controlling
stake of its number one operator. Ncell,
when consolidated, would be immediately
accretive to Axiata’s financials. Based on
Axiata’s 2015 pro forma revenue, EBITDA and
PATAMI, Ncell would have provided an uplift of
approximately 11%, 19% and 13% respectively
on an annualised basis.
The acquisition of Ncell further cements the
Group’s position as one of the leading mobile
operators in the region with close to 290
million customers from approximately 275
million today. We expect the acquisition to be
completed by mid-year 2016.
With these developments, Axiata’s enhanced
footprint will have contiguous presence in five
key countries in the South Asia region and
a total combined reach of close to 2 billion
population
7
in our nine markets in Southeast
Asia and South Asia.
3) Expansion Beyond Mobile into Fixed-
Mobile Convergence (FMC)
On home shores, our expansion beyond
pure mobile services has been significantly
enhanced by a landmark three-party
6
Dialog PAT normalised for levy and forex losses.
7
Total population of 9 countries within the Axiata footprint. Source: World Bank.
axiata group berhad | annual report 2015
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