29 / 284
MANAGEMENT DISCUSSION & ANALYSIS
Axiata Group Berhad | Annual Report 2016
027
In 2016, Celcom’s gross revenue decreased by 9.9% to RM6.6 billion, primarily as a result of a decrease in service revenue from voice, Value
Added Services (VAS) and the Overseas Foreign Workers (OFW) segment. Consequently, there was a 15.3% reduction in EBITDA to RM2.3
billion. Profit After Tax (PAT) dropped by 25.0% to RM976.3 million due to lower EBITDA and higher share of losses from Associates, partly
offset by lower tax expense.
Despite the sluggish Malaysian economy, data revenue accounted for 34.1% of total revenue and continued its growth momentum of 10.0%,
fueled by a 19.0% surge in mobile Internet revenue. With its focus on the data segment of the market, Celcom’s data users of 6.5 million now
represent 61.9% of its total subscriber base of 10.6 million. Moving into 2017, Celcom’s “Refresh” exercise will continue with the Company’s
commitment to deliver superior customer experience and innovative data offerings.
XL saw general improvements in the execution of its “3R – Revamp, Rise, Reinvent” Transformation Agenda with the decline in voice and
revenue outside the Java region stabilising. While XL’s revenue decreased by 0.3% to RM6.6 billion, EBITDA increased by 4.0% to RM2.6 billion,
gaining 1.7 pp to 39.4% compared to 2015. PAT stood at RM112.9 million, signifying more than 100% improvement compared to losses in 2015.
This was primarily due to higher EBITDA contribution and net foreign exchange gain, which was partially offset by accelerated depreciation
arising from the network modernisation plan focusing on profitability, the crux of XL’s Transformation Agenda.
XL’s 4G LTE footprint continued to grow and now spans close to 100 cities, with 8,204 4G Base Transceiver Stations (BTS). This is further
supported by XL’s roll out of UMTS900 which significantly improved the quality of its data services in areas outside Java. With high smartphone
penetration of 63% and data users at 65% of its subscriber base, XL delivered 2016 total traffic growth of more than 100%.
Notwithstanding a challenging market, Dialog maintained its excellent performance across all business units, operating from its position of
strength as Sri Lanka’s market leader. It generated strong gross revenue growth of 16.0% to RM2.5 billion on the back of robust business
performance, recording revenue growth of 16.7%, 27.6% and 5.3% respectively for mobile, fixed and Pay TV operations. As Dialog further
consolidated its position as a market leader, total mobile subscribers increased by 8.8% to 11.8 million subscribers.
EBITDA increased by 21.1% while margin gained 1.4 pp to 33.7%. PAT grew by 159.7% to RM255.9 million, mainly flowing from higher EBITDA.
Mobile data revenue saw a phenomenal increase of 52.4%, with data revenue now making up 23.0% of Dialog’s total mobile revenue. Based
on its strong performance, a cash dividend of SLR0.39 per share was declared for 2016, representing a 35.1% DPR.
At Robi, revenue increased by 6.1% to RM2.8 billion, driven by translation impacts from the appreciation of the Bangladesh Taka (BDT) against
the Ringgit Malaysia, and better performance within its major business segments especially in data which offset voice revenue following the
merger with Airtel. Robi’s subscriber base grew an impressive 19.5% from 28.3 million in 2015 to 33.8 million in 2016, with data subscribers
accounting for 55.8% of its total subscriber base.
Higher regulatory costs associated with revenue growth and network operating cost from an expanded network caused a 19.7% reduction
in EBITDA, with margin decreasing by 8.8 pp to 27.2%. Robi’s operations reported a Loss After Tax of RM205.6 million, impacted by higher
depreciation and amortisation charges arising from the accelerated depreciation of assets affected by the ongoing network modernisation
initiatives.
Smart continued with its strong growth momentum for the year, registering 20.0% increase to RM1.1 billion in gross revenue, mainly driven
by data revenue. This resulted in higher EBITDA growth of 19.4% while PAT increased by 26.3% to RM278.4 million. Data subscribers grew by
25.4% to 3.8 million while data revenue improved by 48.6% with data accounting for 42.3% of Smart’s total revenue.
Performing better than acquisition accretion target, Ncell recorded strong overall performance with contributions of 7.6%, 12.7% and 86.5%
to revenue, EBITDA and PAT of the Group respectively.
At Idea, heightened and intense competition within the telco industry, coupled with increased finance cost and higher depreciation and
amortisation charges, led to a sharp decline in its’ share of results for the year by RM303.7 million to RM65.1 million.
M1’s share of results for the year decreased by RM29.0 million mainly impacted by an increase in depreciation and amortisation expenses from
a higher 4G network asset base and additional spectrum acquired.
OPERATING COMPANIES
For complete details of our OpCos and Affiliates performance in 2016, please refer to pages 38 to 50 of this Annual Report.
ASSOCIATES
2016 IN REVIEW: OVERVIEWOF OPERATING
COMPANIES' PERFORMANCE