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Axiata Group Berhad | Annual Report 2016
MANAGEMENT DISCUSSION & ANALYSIS
022
2016 IN REVIEW: GROUP PERFORMANCE
The Group’s Board of Directors (BOD) declared an interim tax exempt dividend under a single tier system of 5 sen per share, which was paid in the fourth
quarter of 2016. The BOD recommended and announced a final tax exempt dividend under a single tier system of 3 sen per share, bringing the total dividend
declared for 2016 to 8 sen per share.The final dividend is subject to the approval of the shareholders at the forthcoming Annual General Meeting. In 2016, a
total dividend payment of RM1.5 billion was settled via cash of RM790.5 million and through a dividend reinvestment scheme of RM714.6 million.
Capital Requirements, Structure & Resources
Capital Expenditure Requirements
Total capex spent for the year was RM6.1 billion or capex intensity of 28.5% of revenue which was sourced mainly from internally generated funds. In pursuit
of being a clear number one player in 4G and data leadership, the Group has adopted a temporarily prudent dividend payout for 2016 with a 50% Dividend
Payout Ratio (DPR) to ensure the Group cash position is sufficiently resilient while continuing to invest for the future. To support more aggressive technology
investment, the Group is implementing a Group-wide operational to improve efficiency and profitability within a more sustainable cost structure. Cost savings
will be channelled into investments aimed at sustaining long-term growth of the business.
Capital Structure and Capital Resources
The Group’s borrowings increased by RM5.9 billion as compared to RM16.4 billion recorded in 2015 mainly because of the new loan drawdown to fund the
Ncell acquisition in Nepal and forex losses on translation of US Dollar borrowings. These have resulted in the Group’s gearing ratio (total Group borrowings over
Group’s equity attributable to owners of the Company) to increase to about 0.9 times as at the end of 2016 as compared to 0.7 times in the previous year.
Given the economic and currency exposures, the Group is committed to undertake at various initiatives which include hedging and paring down the gearing
to a more comfortable level. The Group remains prudent in maintaining a sound financial position that enables the execution of its strategic objectives in
creating value over the coming years.