AXIATA ... Sept09

AXIATA GROUP in an EXCHANGE filing Aug 27, 2009 said that its 2QE Jun 2009 Net PATMI was up seven-fold QoQ to RM527m, showing further signs of recovery seen in 1QE Mar 2009. Normalised PATAMI expanded a significant 23% to RM422m. The Group also posted strong RM3.2 bil Revenue for the quarter, up 10% from the previous quarter, with growth seen in all key operating companies.

REGIONAL SUBSCRIPTION GROWS
Regional mobile subscribers for the Group grew to almost 100m in the same period. Prudent cost management saw EBITDA grew substantially by 19% in the same period to RM1.2 bil, due to stable margins at CELCOM MALAYSIA and improved performance at PT EXCELCOMINDO PRATAMA tbk, DIALOG GROUP (Sri Lanka) and AXIATA BANGLADESH ltd.

MALAYSIAN OPERATIONS
Excellent execution of segmented marketing in both prepaid and postpaid and the continued focus on mobile broadband saw CELCOM recording the highest quarterly growth in two years. Despite a challenging macro environment, Revenue grew strongly at 5% QoQ to RM1.5 bil, marking one of the best quarters for CELCOM. EBITDA improved by 3% QoQ whilst PATAMI was RM367m, an increase of 3% QoQ.

MOBILE BROADBAND GROWS
The quarter saw CELCOM strengthening its leadership position in mobile broadband with 114,000 Net Additions pushing total subscribers to 420,000 representing an increase of 37% QoQ. For 2QE Jun 2009, mobile broadband contributed 5% of Revenue - up from 4% in the last quarter.

CELCOM is moving into the next phase of its transformation plan focusing on customer touch points and human capital. This will be done concurrently with an accelerated broadband push and continued cost management.

INDONESIAN OPERATIONS
Maximisation of yield and strict cost management saw positive sequential improvements in Indonesia. The focus on quality subscribers that began in 1QE Mar 2009 delivered improved revenue, up 14% through an increase in total outgoing minutes.

AXIATA said that strict cost management as well as a lower direct expense from SIM supply reduction initiatives, to curb calling card phenomena in Indonesia, resulted in a 31% increase in EBITDA QoQ . PATAMI in the period increased by more than 100% to IDR 1,01 bil helped by operational improvements and favourable forex gains.

EXCELCOMINDO will continue to emphasise yield via quality revenue generating subscribers and improving network utilization and cost optimization.

BANGLADESH OPERATIONS
Overall improvement continued in AxB following the encouraging turnaround to date. Strong momentum continued in mobile revenue growth which led to total revenue improving for the third consecutive quarter.

The Company said that concerted focus on cost management has sustained turnaround efforts with better overall performance. The quarter saw a marked increase in EBITDA - up 53% QoQ. The significant increase in EBITDA was due to lower subscriber acquisition and related costs as well as efficient cost containment.

Similarly PATAMI was up significantly by more then 100% to BDT598m due to, prudent spending and cost management. Aggressive marketing strategies will increase moving forward, to ensure sustainable improvements in Bangladesh.

SRI LANKAN OPERATIONS
On-going cost reduction strategies at DIALOG GROUP has seen further quarterly improvements in operations with Group Revenue increasing 4% QoQ driven by growth in DIALOG MOBILE against a very challenging backdrop. Concurrently and amidst fierce competition,

DIALOG achieved 2% subscriber growth and improved MOUs by adopting more competitive pricing strategies. The focus on cost saw improvement in EBITDA - up by 58% QoQ. However, network modernization efforts to improve future network Capex and Opex efficiency resulted in accelerated depreciation of SLR6 bil which impacted PATAMI.

Moving forward DIALOG will continue the strict cost rescaling initiatives, which has already seen early savings in manpower costs of 11% QoQ from the VRS programme conducted last quarter.

DIALOG is looking forward to becoming the first mobile operator to extend its GSM network in the newly liberated areas of the Northern Province of Sri Lanka to capitalize on growth opportunities.

INDIAN AFFILIATE
IDEA continues strong momentum despite competitive pricing pressures from new entrants. Pro forma quarterly performance after adjustment for changes in interconnect rates showed excellent growth across all key measurements with revenue and EBITDA up 6% and 7% respectively. PAT was also up an impressive 11% for the quarter.

The Group is expecting to complete the IDEA-SPIEC merger by 3Q-CY2009.

AXIATA's Chairman - AZMAN HJ MOKHTAR said that " .... We are very pleased with the performance achieved this quarter. The Group's focus on operations and cost has garnered positive results, a resounding confirmation that we are on the right track. Although economic conditions appear to be improving volatility is still an issue. However, given the continued improvements this quarter, and our well positioned balance sheet, now de-levered through proceeds of the Rights Issue, we are confident that our momentum will remain strong in Malaysia and regionally ....".

President & Group CEO - JAMALUDIN IBRAHIM said " .... We are happy with the continued strong results, now for two consecutive quarters, with both the top line revenue growth and bottom line profit improvements. It should be particularly noted that for the quarter, all key Operating companies, including IDEA, showed improvements in almost all key financial metrics. The stellar results indicate that we are going down the right path with the strategies implemented at the beginning of the year (2009). On the operating companies, we are especially pleased with the strong performance seen at CELCOM and IDEA, as well as the major turnaround at XL and AxB. The quarter also saw improvements at DIALOG with improved EBITDA; however, there is still much room for improvement ....".

MOVING FORWARD
" .... Based on the performance so far, we expect the Group's full year revenue and EBITDA growth to be towards the higher end of our KPIs, and for ROE to be moderately above what was earlier guided. This is of course subject to FOREX fluctuations or other external factors that could materially affect our performance in the second half of the year (2009) ...." added JAMALUDIN. With the uncertain economic environment, the overall focus for 2009 on EBITDA and cash has so far paid off.

Given the improvement in demand and the strong revenue trend seen in the quarter, selective and new organic investments will also be made to increase revenue in 2009 and to pave the way for 2010 said JAMALUDIN.

AXIATA's PROFILE
AXIATA is a Government controlled entity involved in mobile telco operations focussing in high growth low penetration emerging markets.

AXIATA has controlling interests in mobile operators in Malaysia, Indonesia, Sri Lanka, Bangladesh and Cambodia with significant strategic stakes in India, Singapore and Iran. India and Indonesia are amongst the fastest growing markets in the world.

In addition, the holding company has stakes in non-mobile telecommunication operations in Thailand and Pakistan.

The Group's mobile subsidiaries and associates operate under the brand name 'Celcom' in Malaysia, 'XL' in Indonesia, 'Dialog' in Sri Lanka, 'AKTEL' in Bangladesh, 'HELLO' in Cambodia and 'Idea' in India, 'M1' in Singapore and 'MTCE' in Iran (Esfahan).

As of Jun 2009, the Group, including its units and associates, has close to 100m mobile subscribers in Asia.

GROUP REVENUE & EMPLOYMENT
The Group Revenue for 2008 was RM11.3 bil. The Group provides employment to over 25,000 people across Asia.

AXIATA's vision is to be a regional champion by 2015 by piecing together the best throughout the region in connectivity, technology and people.