KUALA LUMPUR (Aug 28): Axiata Group Bhd (KL:AXIATA) is confident of exceeding its “mid-teens” earnings growth target, and meeting its “mid-single digit” revenue growth target for the current financial year ending Dec 31, 2024 (FY2024), said chief executive officer and managing director Vivek Sood.

For the first half of the year (1HFY2024), six out of Axiata's eight operating companies posted double-digit year-on-year growth in earnings before interest and tax (Ebit), except for Sri Lankan Dialog and Indonesia fibre unit PT Link Net Tbk which both saw a double-digit fall in Ebit.

“[For FY2024] the group expects to see revenue to be in line, while Ebit growth to be ahead of KPIs [key performance indicators] on the strong performance in 1HFY2024 and continuing trend in our forecasts,” Sood said in a virtual press conference on Wednesday.

Giving an update on the four major corporate actions, Sood said the first one — proposed merger between XL Axiata and Smartfren in Indonesia — is awaiting regulatory approval and is expected to be completed by the fourth quarter of FY2024.

Meanwhile, the delayering exercise in Indonesia to carve out Link Net to become a wholesale fibre provider is expected to complete by the third or fourth quarter of the year.

Sood said the third corporate action — Axiata’s Dialog's merger with Bharti Airtel in Sri Lanka to become a significant market leader in the mobile segment — was completed in June.

As for the monetisation of edotco Group Sdn Bhd’s Myanmar operation, it is expected to be completed in the fourth quarter. edotco is a 63%-owned subsidiary of Axiata.

“The first and the third one I think is important. Once we complete this, pretty much all our markets would be a three-player market. And we think that's a nice spot in a consolidated market, where having either a leading position or a substantial position would provide better returns for our shareholders going forward,” Sood said.

When asked about the impact of last month's social unrest in Bangladesh, Sood said the estimated revenue loss amounted to about US$10 million (RM43.48 million), which is regarded as minimal, and the business recovery has been quick.

“We think with the formation of the interim government, somewhat stability has come back. This change would also allow for certain rethinking on the regulations as well as the way forward for the country, which may be a positive development for the industry,” he added.

As for the group’s Sri Lankan unit, Axiata said the projected synergies between Axiata’s Dialog and Bharti Airtel can be expected to come in mid-2025.

On the second 5G development in Malaysia, Axiata said its 33.1%-owned associate CelcomDigi Bhd (KL:CDB) is well-placed to build the new network given its size of the network, modernisation and customers coverage. The company has submitted an application to the Malaysian Communications and Multimedia Commission (MCMC) on the matter.

As for Indonesia, Sood said the group will still focus on the 4G market given the 4G under-coverage in the country and with the government not entirely ready to offer spectrum for 5G.

Nevertheless, the merger between XL Axiata and Smartfren will enable the group to provide a strong spectrum portfolio that could be a leverage for the group for 5G.

Axiata's management also noted that the strengthening ringgit could benefit the group in terms of foreign exchange gains and interest savings given the high US-dollar denominated debts of the group totalling about US$2.3 billion.

It added that the imminent global interest rate cut will help drive business valuations which could be beneficial for the group’s asset monetisation plans.

Shares in Axiata closed up two sen or 0.82% at RM2.46 on Wednesday, giving the group a market capitalization of RM22.59 billion. Year-to-date, the stock has risen 5.2% and pays an indicative dividend yield of 4.1%.