KUALA LUMPUR: Axiata Group Bhd posted a RM797.4 million net loss for the third quarter ended Sep 30, 2023 (3Q2023) after booking a RM1 billion asset impairment from its plan to exit Nepal's Ncell Axiata Ltd (Ncell).
According to its filing with Bursa Malaysia Securities Bhd, the board of directors' of Axiata approved the group's intention to exit the Nepal mobile segment on Sep 29, 2023.
Profit after tax and minority interest (Patami) for continuing operations, which excludes the financial results and impairments made for Ncell as an asset held for sale, however increased by more than 100 per cent to a net profit of RM27.1 million.
This was mainly driven by higher revenue, lower foreign exchange losses and share of profits from associates mainly from CelcomDigi Bhd, and partially offset by higher depreciation and amortisation, and higher finance costs.
The merger of Axiata's subsidiary Celcom and Digi was completed on Nov 30, 2022.
Earnings before interest and tax (ebit) for continuing operations was up 8.2 per cent year-on-year for 3Q2023 to RM678.5 million.
Revenue for the quarter was up almost six per cent to RM5.69 billion, compared with RM5.37 billion in the same quarter in financial year 2022.
"In recent years, Axiata has directed its resources and investments towards growth categories. To achieve this, we have made several strategic moves - delivering on the synergies of CelcomDigi, continuing the fixed broadband and mobile convergence in Indonesia, creating value through our infrastructure business, illuminating the value of our digital businesses, and building our business in frontier markets."
"Axiata will actively invite new investors to support our growth and monetisation as the need arises."
The outlook in Nepal is increasingly challenging, thus the board has decided to exit Nepal and accordingly reclassify Ncell as asset held for sale. We believe this move will place Axiata in a much stronger position to deliver on our strategic priorities and is in the best long-term interest of all our shareholders," Axiata group chief executive officer and managing director Vivek Sood said in a statement.
A sale of Ncell is expected within a year.
Impairments for Ncell pushed Axiata to book a RM1.3 billion net loss for the nine-month period ended Sep 30, 2023, compared with a net loss of RM201.8 million for the corresponding period in FY2022.
This included the provision for impairment of assets of RM1.5 billion and write-off of capital gains tax related receivables of RM396.1 million after it failed to make its case at Bilateral Investment Treaty (BIT) arbitration proceedings between Axiata Investments (UK) Limited and Ncell against Nepal in Q223.
Patami for continuing operations, which excludes financial results and impairments from NCell, improved by 87.9 per cent to a loss of RM141.0 million on higher revenue, significantly lower foreign exchange losses, share of profits from associates mainly from CelcomDigi and lower taxes. This was partially offset by higher depreciation and amortisation and finance costs.
Ebit for continuing operations for the nine-month period ended Sep 30, 2023, was up 4.8 per cent to RM1.98 billion.
Revenue for the period jumped 10 per cent to RM16.4 billion, compared with RM14.8 billion a year ago.
Axiata's board of directors believe the group's operational performance for FY23 will be broadly in line with headline key perfomance indicators of mid-single digit revenue growth, and high-single digit ebit growth.