UPDATE 1-Malaysia Axiata Q1 net drops; forex losses weigh

* Net profit slumps 84 percent

* Forex loss at 216.2 mln ringgit

* Sees FY2009 results in line with KPIs

* Shares rise 5 pct ahead of results

KUALA LUMPUR, May 19 (Reuters) - Malaysian mobile phone company Axiata Group (AXIA.KL) reported a sharp drop in quarterly net profit on weaker overseas operations and foreign exchange losses, and forecast full-year results that analysts said were below expectations.

State-controlled Axiata, which owns mobile assets in Indonesia, Sri Lanka and India, said its annual results would be in line with key performance indicators (KPIs) announced last month, but analysts have said the KPIs, which include 4-6 percent growth in EBITDA (earnings before interest, tax, depreciation and amortisation), were lower than expected.

January-March net profit fell to 63.9 million ringgit ($18 million) from 402.7 million ringgit a year earlier. Revenue was up 5.4 percent at 2.87 billion ringgit.

The company said the ringgit's moves against regional currencies hit its translated revenue, which would otherwise have grown by 7.7 percent.

Local analysts do not provide quarterly forecasts. Prior to the earnings, Axiata was expected to earn 1.18 billion ringgit for fiscal 2009, more than double the previous year's 498 million ringgit, according to Reuters Estimates.

Rival Singapore Telecommunications (STEL.SI), Southeast Asia's top telecoms firm, last week reported a 17 percent drop in January-March profit, dented by a strong Singapore dollar. [ID:nSIN333734]

Axiata raised 5.25 billion ringgit from shareholders in April to reduce debt and fund its fast-expanding overseas operations.

The telco has controlling stakes in Indonesia's Excelcomindo (EXCL.JK) and Sri Lanka's Dialog Telekom DIAL.CM. Last July, it bought a 15 percent stake in Idea Cellular (IDEA.BO), India's fifth-largest mobile operator, for about $1.5 billion.

Analysts say Axiata offers good long-term growth potential given its exposure to growing Asian mobile markets, but its near-term earnings outlook is expected to remain volatile due to currency swings and regional political risk.

Axiata shares ended 5 percent higher at 2.32 ringgit before the earnings. The stock has fallen 6 percent so far this year, underperforming the broader market's .KLSE 16.6 percent gain. (Reporting by Soo Ai Peng, Editing by Ian Geoghegan)