Friday February 22, 2013
Axiata to pay biggest ever dividend of RM3bil after stellar performance
By NG BEI SHAN
KUALA LUMPUR: Axiata Group Bhd has declared its biggest ever dividend payout amounting to RM3bil following its stellar results for the financial year ended Dec 31, 2012, almost doubling the RM1.6bil paid in the previous financial year.
Group chief financial officer James Maclaurin said the company had RM8bil in cash and RM3bil was used to reward shareholders.
“This is a reflection of our increasing confidence to generate cash,” he told a briefing here yesterday.
Axiata's dividend payout ratio was 30% in 2010, 60% in 2011 and 70% in 2012. On top of the 70% payout, the company is paying out a special one-off dividend of RM1bil.
A company official told StarBiz that the dividend payout ratio worked out to be 106%.
The company would pay a combined dividend of 35 sen per share, which included a special one-off dividend of 12 sen, subject to shareholders' approval.
Following the announcement, its share price jumped 12 sen to close at RM6.33 with a turnover of 20.33 million shares and helped push the benchmark FBM KL Composite Index 2.34 points higher.
According to president and group chief executive officer Datuk Seri Jamaludin Ibrahim, the company had a record performance for the financial year ended Dec 31, 2012.
Its full-year revenue rose 8.3% to RM17.65bil compared to RM16.29bil in the preceding financial year while earnings rose 7.1% to RM2.51bil from RM2.35bil, boosted by strong performance from its operating companies.
The growth was backed by continuous growth of its key markets: Celcom in Malaysia, XL in Indonesia, Dialog in Sri Lanka and Robi in Bangladesh which saw their revenue rose 7%, 15%, 24% and 27% respectively.
Maclaurin noted that Bangladesh and Sri Lanka were catching up in terms of revenue contribution to the group. “Growth in these two markets are becoming more significant,” he said.
On the update of the rollout in its long-term evolution services in Malaysia, Jamaludin said there would be a “big launch” this year following the announcements by other local players.
As for the potential growth areas, he said it would continue to focus on the urban areas in Malaysia and also increase its share in the foreign workers segment.
“Most importantly, we will focus on data which has grown 32%,” he said.
It sees Indonesia growing in all aspects and opportunities in the vast population spreading across urban, sub-urban and rural areas.
“The number of smartphones (in Indonesia) has almost doubled in one year, therefore leading to higher revenue in data.
“In Sri Lanka, data is (the) big (thing), while in Bangladesh, the focus is on traditional subscribers,” he said, adding that there was still much room for further penetration in Bangladesh due to its high population of 150 million people.
As for its capital expenditure (capex), the telco giant had guided an allocation of RM4.5bil, of which RM1.9bil would be used in Indonesia.
“The capex allocated for Celcom will be a mix of investment in long-term evolution, information technology and network expansion,” Maclaurin said.
On entering Myanmar, the last greenfield in the region, Jamaludin said it was hopeful despite the intensifying competition and was still awaiting approval from the Myanmar government.
He also expected the telco industry to further consolidate in the region, adding that most markets could take in between three and five players.
“As long as there is consolidation, we (as a player) will benefit,” he said.
Jamaludin said he was open to the idea of merger and acquisition but nothing was imminent currently.
Last year, Axiata bought its Cambodian rival Latelz Co for RM470mil and expects the acquisition to be earnings-accretive this year.
“We completed the acquisition this week and the integration process is on track,” he said.
An analyst told StarBiz that the dividend payout was a positive move as the company had strong free cashflow and RM7.9bil in cash.
“We had anticipated a special dividend but the quantum appears generous,” he said.
However, another analyst opined that the company should be conserving cash, given the bleak outlook and its plans to expand into Myanmar and India.
He said the company's headline key performance indicators (KPIs) outlook for 2013 was weak and the margins were also thinner.
In a filing with Bursa Malaysia, Axiata said its 2013 earnings before interest, tax, depreciation and amortisation growth headline KPI is 0.2% compared to 1.8% in 2012.