Celcom Axiata-DiGi merger still work in progress

THE proposed merger of Celcom Axiata Bhd and DiGi.Com Bhd is still a work in progress which includes numerous engagements with the regulator, Malaysian Communications and Multimedia Commission (MCMC).

Axiata Group Bhd president and group CEO Datuk Izzaddin Idris said the group had kicked off the integration team to plan for day one within the confined legal limitation.

“A lot of work has been covered since the formal process announced in September last year. We are hopeful that the evaluation decision from MCMC will come soon,” he told reporters after the group’s financial year 2021 (FY21) results briefing yesterday.

Izzadin also reserved his comment on the 5G rollout, saying he would only talk about it once the government has made a decision on the matter.

Last Friday, Communications and Multimedia Minister Tan Sri Annuar Musa said his ministry and the Ministry of Finance will table a Cabinet ministers’ memorandum next month to resolve the issues relating to Digital Nasional Bhd “once and for all” as the choice between a single wholesale network or dual wholesale network system has become a debate.

He hopes to resolve it following the findings of the National Digital Economy and IR4.0 Council meeting last Thursday.

Meanwhile, Axiata has put the listing of its subsidiaries, edotco Group Sdn Bhd and Boost Holdings Sdn Bhd, on hold as the group was not in a rush to go into the IPO market yet.

“For edotco, it has invested in Myanmar, we are not quite sure how the market will perceive an IPO involving Myanmar. What we’ve been advised is that for so long we have Myanmar as part of our portfolio, that can be a bit of a challenge if we were to try to list edotco. So, we need to tackle that matter first.

“Currently, edotco managed to raise capital to do its expansion without going into the public market. We have seen the acquisition of Touch Mindscape Sdn Bhd for RM1.7 billion with RM1.4 billion debt and RM300 million from its internal resources. So, there is no restriction or limitation for us to list edotco which was meant to raise capital,” he explained.

On Boost e-wallet, he said the group would wait for the announcement of the digital banking license by Bank Negara Malaysia, which is expected to be awarded next month.

“The value of the company will certainly be enhanced if we have the digital banking license. It might take a bit of time,” he added.

Axiata’s net profit rose to RM818.9 million in the financial year ended Dec 31, 2021, from RM365.16 million a year ago.

Revenue rose 7% to RM25.9 billion from RM24.2 billion previously, while Ebitda also increased 7% to RM11.4 billion from RM10.66 billion, with growth across all operating companies except mobile operations in Nepal.

For the fourth quarter ended Dec 31, 2021 (4Q21), Axiata’s net profit was RM116.02 million compared to a net loss of RM255.96 million in 4Q20, while revenue was up to RM6.9 billion from 6.26 billion.

The group also declared a second interim dividend of 5.5 sen per share, bringing total dividends for FY21 to 9.5 sen, equivalent to a RM871.5 million payout. The details of entitlement and the payment date of the dividend will be determined and announced in due course.

Izzaddin said the group plans to invest RM7.1 billion in capital expenditure this year.

“Entering 2022, the group will be focused on sustaining its growth momentum and is circumspect in targeting a mid-single digit for revenue growth and a high single digit for Ebit growth in view of prevailing tough external conditions.

“Moving forward, we will be closely monitoring macroeconomic, regulatory and industry risks in addition to developments in Myanmar. Business-wise, we are positive about upsides in Indonesia, a revenue uplift from demand for data, digital content and enterprise digital transformation as well as the integration of completed acquisitions in 2021. We’re also looking at potential inorganic opportunities in 2022,” he said.

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