KUALA LUMPUR: Axiata Group Bhd's net profit plunged 63.7 per cent to RM80.02 million in the second quarter ended June 30, 2020 from RM220.56 million recorded in the same quarter a year ago.
Its revenue eased 5.9 per cent to RM5.79 billion from RM6.15 billion previously.
In a statement today, Axiata said it had been affected by lockdown effects of the Covid-19 pandemic and pre-existing challenges in its Nepalese operating company (opco) Ncell Axiata Ltd.
"All opcos affected on two major fronts – subscribers' accessibility to prepaid reload due to closure of outlets, and foregone revenue from free data and bonus recharge offered to customers," it said.
Axiata president and group chief executive officer Tan Sri Jamaludin Ibrahim said in line with macroeconomic uncertainties, directionally, the group expected to record a low single digit percentage decline in revenue and earnings before interest, taxes, depreciation and amortisation (Ebitda) in 2020.
He said the full impact of Covid- 19 was felt heavily in the Q2, especially in April when movement restrictions were in full throttle across its markets.
"Although Malaysia eased into recovery following swift and decisive moves to soften pandemic blows, the crisis rages on in our region. As a result of the protracted financial and economic turmoil, unemployment continues to spiral as the industry confronts headwinds in the short to medium-term."
"Against this backdrop, we are encouraged that our cash position remains strong, and we continue to be ahead of our RM5 billion cost optimisation target by one year, as evidenced from the Ebitda margin improvement.
"It has also been encouraging to witness the operational resilience demonstrated by most of our opcos," he said.
Jamaludin said by June, most of the group's opcos had largely recovered back to pre-lockdown revenue levels.
"Uncertainties, however, continue to mar the horizon as governments and businesses grapple with the post-lockdown impact to economies.
"We will exercise prudence and continue to keep a watchful eye on the risks and ongoing financial and operational effects of Covid-19 to our businesses.
"We are also keenly taking advantage of opportunities in the Enterprise, Digital and Home segments as evidenced by the accelerated pace of digitalisation," he said.
For the 1H of financial year 2020, Axiata's net profit dropped 71.6 per cent to RM268.12 million from RM945.72 million, while revenue decreased marginally at 2.2 per cent to RM11.83 billion from RM12.1 billion.
It said underlying net profit further impacted by higher depreciation and amortisation (D&A) and higher losses from digital business on contribution to the e-Tunai Rakyat initiative.
"Due to Covid-19 effects, the group estimates a revenue impact of RM400 million in 1H of 2020 mainly from distribution shutdowns and outlet closures during stringent movement controls, preventing subscribers from accessing prepaid reloads as well as the provision of free data and bonus recharge to customers.
"In prioritising emergency needs as Malaysia and the region faced an unprecedented healthcare crisis, sharp economic contractions and rising unemployment in the second quarter, Axiata and its opcos extended assistance in cash and in- kind of RM80 million."
Axiata said efforts were focused on ensuring connectivity for frontliners as well as other protection and prevention initiatives including contributions to national disaster recovery efforts in Malaysia, Indonesia, Cambodia, Sri Lanka, Bangladesh and Nepal.
"Concessions were also made by opcos to provide flexibilities in payment to cater to subscribers impacted by the pandemic," it said.