Malaysia's Axiata Group has reported a 13.3% drop in profit for the first quarter due to profit pressures faced by subsidiaries Celcom and XL.
Revenue grew 5% year-on-year to 4.8 billion ringgit ($1.33 billion), but net profit for the period fell to 585 million ringgit.
Malaysian mobile unit Celcom faced challenges due to its IT transformation project, with profit falling 12% despite a slight 1% increase in revenue.
Celcom's data revenue swelled 36% year-on-year to account for 26% of revenue, compared to 19% in the previous year.
Indonesian subsidiary XL Axiata reported a flat 5.5 trillion rupiah ($418.7 million) in revenue, partly as a result of reduced tower rental revenue. Date revenue improved 29% year-on-ear to account for 32% of total service revenue.
In Sri Lanka, Dialog Axiata's revenue improved 6% year-on-year to 17.3 billion rupees ($129.7 million). In Bangladesh, Robi Axiata revenue's gained 4% but profit declined. In Cambodia, Smart recorded a strong 40% revenue growth - with data growth more than doubling - and a net profit increase of 72%.
Regional associates Idea in India and M1 in Singapore also had a strong quarter. Idea's revenue grew 19% while its profit for India's full financial year swelled 62%. M1 reported revenue growth for the quarter of S$294.8 million ($220.8 million), up 23% year on year.
“The first quarter continued to be challenging for Celcom, affecting the Group’s results, as strong foundations are being put in place for data leadership and regaining any lost ground,” Axiata group CEO Dato' Sri Jamaludin Ibrahim commented.
However, I am happy to note that there are many positive signs as they resolve most of the IT systems issues whilst recovering dealer confidence. I am confident that with these initiatives in place, Celcom will be back on track to finish the year in a position of strength.”
He said data growth remains a key area of focus for Axiata. The group spent over 1 billion ringgit in capex during quarter, primarily on data investments.