* Axis, weaker rupiah currency to weigh on Axiata's total
* Axiata targets to grow 2014 revenue by 10.1 pct, driven by
* No immediate plans to list Axiata's tower asset
By Yantoultra Ngui
KUALA LUMPUR, Feb 20 Axiata Group Bhd
said it expects Indonesia, the Malaysian telco's second largest
market, to weigh on profits in 2014 as the Malaysian firm
integrates mobile phone operator PT Axis Telekom Indonesia this
year to expand marketshare.
While Axiata's total revenue is targeted to grow by 10.1
percent this year, driven by a growing subscriber base in
Indonesia, the weaker rupiah currency against the U.S dollar
will also curb profit growth, CEO Jamaludin Ibrahim said.
This adds pressure to Axiata, which reported 1.6 percent
increase in 2013 profits to 2.55 billion ringgit as higher
operating costs in Indonesia dragged on strong earnings in the
firm's businesses in Southeast Asia and South Asia.
Stripping out Indonesia, Axiata said it would have recorded
double digit growth in all key lines of revenue and profits.
"Total revenue in 2014 will increase (after integration with
Axis) but there will be negative impact on the profit side, Axis
is loss-making," Jamaludin told reporters in the Malaysian
capital on Thursday after the earnings announcement.
XL Axiata, Indonesia's second largest telecoms
group and part of Axiata, bought over Axis 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.
Jamaludin said integration with Axis, which is expected to
add 3-4 percent to Axiata's existing Indonesia revenue this
year, will likely be completed in April once XL Axiata gets
final approval from Indonesian authorities.
Axiata, which has operations in much of Southeast Asia as
well as India, Sri Lanka and Bangladesh was initially expected
to list its telco tower assets worth $500 million. Sources had
told Reuters Axiata had engaged bankers for the deal that could
happen as early as 2014.
But Jamaludin said there was no immediate plans to list the
assets, as Axiata would instead be focusing on cutting costs and
increase revenue from its tower business. Axiata usually
allocates 20 percent of its annual 4 billion ringgit capex for
its tower business.
Axiata shares were down 0.3 percent to 6.53 ringgit after
the earnings announcement, in line with the broader market
(Reporting By Yantoultra Ngui; Editing by Niluksi Koswanage and