Joint acting CEO Vivek Sood, who is also the chief financial officer, said the group sees the situation in Sri Lanka as “temporary”.
In any case, he pointed out, there is an opportunity in every crisis.
“For example, we are trying to consolidate our data centres in Sri Lanka from seven to three. This is something we might do in the normal course of business, but the current crisis has forced us to do so,” he told the media during Axiata’s second quarter financial results briefing, yesterday.
“Our view is, once the crisis is over, the company would be far more resilient and prepared to deliver a better outcome. As a brand, Dialog remains strong in the market,” he added.
Against the US dollar, Vivek pointed out, the Sri Lankan rupee has depreciated by 80% since the country defaulted.
He said that in the past two month, the currency has held the 360 level against the greenback.
In addition, the International Monetary Fund (IMF) has also engaged with the government to extend credit facilities which, Vivek believes, would help Sri Lanka’s liquidity.
Axiata’s other joint acting CEO Hans Wijayasuriya expects the Sri Lankan rupee to stabilise at this level, at least in the short run, on the back of the developments with the IMF and statements of confidence from the country’s central bank.
Overall, he believes that Axiata is on track to exceed key performance indicators (KPI) it had set out at the start of the year, from an operational performance perspective.
“We could be looking at maybe a high single digit revenue growth as well as double digit earnings before interest and tax (EBIT) growth for the full year,” said Wijayasuriya.
“Having said that, we are also cognizant of the fact that the macroeconomic situation in some countries is still not stable enough and we are monitoring those reactions to manage that situation,” he said.
On the proposed merger between Celcom Axiata Bhd and Digi.com Bhd, Vivek said the process is going smoothly and is expected to be completed before the end of this year.
He said Axiata expects to hold an extraordinary general meeting (EGM) to obtain approval from its shareholders in November.
For the quarter ended June 30 (Q2 2022), the group reported a net loss of RM106.38 million compared with a net profit of RM277.76 million recorded in the same quarter a year ago.
It attributed the poorer financial performance to unrealised foreign exchange losses from Dialog and Axiata due to the strengthening US dollar, higher taxes in the form of the one-off prosperity tax in Malaysian entities and surcharge tax in Dialog and net finance cost.
Its revenue for the quarter rose 4.9% to RM6.7 billion from RM6.39 billion.
For H1 2022, Axiata saw a net loss of RM149.35 million against a net profit of RM353.32 million registered in H1 2021, while revenue grew 5.8% to RM13.17 billion from RM12.45 million.