August 27, 2014 / 5:35 AM / 3 years ago

UPDATE 1-Malaysia's Axiata Q2 profit drops 30.5 percent

3 Min Read

(Adds details on revenue growth, plans for overseas units)

KUALA LUMPUR, Aug 27 (Reuters) - Axiata Group Bhd, Malaysia's biggest mobile phone operator by market value, said on Wednesday second-quarter net profit dropped 30.5 percent on foreign exchange losses, slower growth in Malaysia and acquisition costs.

Net profit stood at 447.8 million ringgit ($142.07 million) in the quarter ended June 31, compared to 644.78 million ringgit a year ago, Axiata said in a filing with the stock exchange. Revenue was flat at 4.73 billion ringgit from 4.63 billion ringgit.

Analysts did not provide quarterly earnings forecasts on Axiata, according to Thomson Reuters data.

"Whilst Celcom, the Axis acquisition and forex translation dragged earnings in the short term, overall good operating performance was seen in all other markets," Axiata said.

Axiata will see a single-digit revenue growth this year, lower than its target of 10.1 percent, due to the challenging environment of the industry, chief executive Jamaludin Ibrahim said at a new conference. Volatile currency changes, especially the decline in the Indonesian rupiah, remains a concern.

XL Axiata, Indonesia's second-largest telecom group and part of Axiata, will open bidding for some of its telecom towers in September and announce the results a few weeks after, Jamaluddin said.

XL Axiata bought rival PT Axis Telekom Indonesia in a $865 million deal last year from Saudi Telecom in a bid to boost its footprint in the world's fifth-most populous country.

XL Axiata said on July 1 that it plans to sell towers and use the proceeds to cut its debt.

Jamaluddin said there were no plans to exit from its overseas investments, although its operations in Pakistan are currently "under review".

Axiata currently has controlling interests in mobile operators in Malaysia, Indonesia, Sri Lanka, Bangladesh and Cambodia, next to holdings India, Pakistan and Singapore.

It will also consider increasing its stakes in existing companies if the opportunities arise, as the company has a comfortable gearing level to fund acquisitions, he added.

The company announced an 8 sen per share dividend.

For the full statement, please see:

$1 = 3.15 Malaysian ringgit Reporting By Yantoultra Ngui and Al-Zaquan Amer Hamzah; Editing by Matt Driskill

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