KUALA LUMPUR (May 22): Telecommunications group Axiata Group Bhd slipped into the red in the first quarter ended March 31, 2018 (1QFY18), posting a net loss of RM147.41 million compared with a net profit of RM239.02 million.

In a statement today, Axiata attributed the quarterly loss to higher share of business losses from its Indian associate Idea Cellular Ltd of RM124.3 million as the Indian telecommunications market continued to struggle with the devastating price war and a hypercompetitive market.

"Excluding the impact of Idea, net profit for the group would have been up by 34.6% or RM386.9 million," said Axiata.

This resulted in the group recording loss per share of 1.6 sen in 1QFY18 compared with earnings per share of 2.7 sen in 1QFY17.

Quarterly revenue fell 2.3% to RM5.75 billion from RM5.88 billion a year ago due to foreign exchange translation impact as the ringgit strengthened significantly against all operating companies' regional currencies compared with the same period in 2017.

Axiata also said group-wide cost optimisation programme remains on track to deliver the targeted RM1.3 billion of savings for 2018.

"Balance sheet for the group was healthy with gross debt/earnings before interest, tax, depreciation and amortisation at 2.23 times in 1QFY18 versus 2.4 times in 1QFY17. During the quarter under review, the group generated RM160 million in operating cash," it added.

Axiata noted that Celcom Axiata Bhd's service revenue rose 2% year-on-year in 1QFY18, on the back of growth in prepaid revenue.

"Celcom continued to focus on high value customers as year-on-year average revenue per user improved by RM6 for postpaid and RM4 for prepaid.

"Aggressive network investments lifted its 4G and 4G LTE-A population coverage to 88% and 76% respectively," said Axiata.

Axiata president and group chief executive officer Tan Sri Jamaludin Ibrahim said while it remains in line with expectation, Axiata's investment in Idea continues to be challenging.

"The current state of the industry in India has led to foreign operators either exiting the market or consolidating. Delays in the proposed merger between Idea and Vodafone India will bring further impact to Axiata.

"We also expect regulatory matters in Sri Lanka, Malaysia and Bangladesh, as well as currency fluctuations as challenges for the year," he warned.

"In our newer business portfolios, we believe edotco's growth and expansion will bring material gains for the group. We will continue to invest in key digital businesses such as digital financial services and enterprise solution or Internet of Things," said Jamaludin.

Axiata shares fell 6 sen or 1.17% to close at RM5.07 today, with 1.26 million shares done, bringing a market capitalisation of RM45.88 billion.