Axiata's records unprecedented forex losses in 2016

Axiata Group Bhd's pre-tax profit for financial year ended Dec 31, 2016 slipped by 66 per cent to RM1.14 billion due to, among others, merger and acquisition-related costs and underperformance of operating companies and associates.

In 2015, its pre-tax profit was RM3.33 billion.

In a filing to Bursa Malaysia today, Axiata said, its revenue, however rose to RM21.56 billion for the year ended Dec 31, 2016 compared with RM19.88 billion in 2015.

Explaining further, it said, externally, the ringgit's depreciation and volatility against the US dollar resulted in the group recording a substantial pre-tax foreign exchange (forex) losses of RM685 million mainly due to the US dollar-exposed debt incurred from the acquisition of Nepal's Ncell.

"Aggressive competition in India with the entry of a disruptive new player, at an unheard of scale, resulted in considerably lower contribution from the group's associate by RM304 million," it said in the filing.

It said continuing its strategic investments and merger and acquisition for long-term growth the group incurred several financial costs.

In strengthening Robi Axiata Ltd's market position in Bangladesh with the first telecoms consolidation, the group incurred merger fee and related costs totalling RM87 million and at the same time, Ncell's acquisition-related costs amounted to RM313 million during the year, it added.

For the fourth quarter, Axiata recorded a pre-tax loss of RM273.64 million as compared to a pre-tax profit of RM829.68 million for the same quarter in 2015.

Revenue was slightly higher at RM5.78 billion as compared with RM5.36 billion previously. -- Bernama