Axiata Group Berhad Intermin Financial Statements - 2Q 2017

Transcription

1. AXIATA GROUP BERHAD (242188-H) The Board of Directors of Axiata Group Berhad is pleased to announce the following unaudited interim results of the Group for the financial period ended 30 June 2017. UNAUDITED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 2nd Quarter Ended Financial Period Ended 30/6/2017 30/6/2016 30/6/2017 30/6/2016 RM'000 RM'000 RM'000 RM'000 Operating revenue Operating costs - depreciation, impairment and amortisation - foreign exchange (losses)/gains - domestic interconnect and international outpayment - marketing, advertising and promotion - other operating costs - staff costs - other losses - net Other operating income - net Operating profit before finance cost Finance income 6,058,566 5,310,097 (1,443,646) (36,615) (668,921) (537,972) (2,124,313) (453,498) (7,658) 69,120 855,063 (1,390,518) 6,385 (513,478) (403,584) (1,953,186) (374,145) (7,091) 183,292 857,772 11,939,538 10,318,938 (2,961,628) (89,896) (1,310,346) (1,025,997) (4,293,279) (882,056) (18,488) 134,082 1,491,930 (2,555,576) (260,195) (1,010,310) (813,547) (3,793,761) (760,234) (51,230) 207,614 1,281,699 53,569 13,188 94,379 64,538 (337,854) 105,886 (231,968) (294,733) (185,754) (480,487) (656,620) 169,841 (486,779) (550,249) 79,127 (471,122) Joint ventures - share of results (net of tax) (17,322) (18,050) (36,467) (40,464) Associates - share of results (net of tax) - loss on dilution of equity interests Profit before taxation Taxation Profit for the financial period (78,255) (9,816) 571,271 (92,194) 479,077 37,153 409,576 (177,308) 232,268 (89,646) (9,816) 963,601 (222,491) 741,110 128,753 (1,732) 961,672 (328,204) 633,468 Finance cost excluding net foreign exchange gains/(losses) on financing activities Net foreign exchange gains/(losses) on financing activities Other comprehensive income: Items that will not be reclassified to profit or loss: - actuarial gains/(losses) on defined benefits plan, net of tax Items that may be reclassified subsequently to profit or loss: - currency translation differences - net cash flow hedge - net investment hedge - available-for-sale reserve Other comprehensive income for the financial period, net of tax Total comprehensive income for the financial period Profit for the financial period attributable to: - owners of the company - non-controlling interests Total comprehensive income for the financial period attributable to: - owners of the company - non-controlling interests Earnings Per Share (sen) (Part B, Note 13) - basic - diluted 4,423 (2,606) 2,862 (2,606) (839,311) (23,802) 7,692 (850,998) (371,921) 480,281 15 (28,529) 693 449,854 682,122 (629,684) (28,489) (41,267) (1,358) (697,936) 43,174 (521,342) (1,445) (14,528) (1,757) (541,678) 91,790 407,205 71,872 479,077 188,934 43,334 232,268 646,221 94,889 741,110 557,190 76,278 633,468 (278,141) (93,780) (371,921) 546,136 135,986 682,122 137,300 (94,126) 43,174 51,272 40,518 91,790 4.5 4.5 2.1 2.1 7.2 7.2 6.3 6.3 (The above Consolidated Statement of Comprehensive Income should be read in conjunction with the Audited Financial Statements for the financial year ended 31 December 2016)
2. AXIATA GROUP BERHAD (242188-H) CONSOLIDATED STATEMENT OF FINANCIAL POSITION 30/6/2017 RM'000 Unaudited CAPITAL AND RESERVES ATTRIBUTABLE TO OWNERS OF THE COMPANY Share capital Share premium Reserves Total equity attributable to owners of the Company Non-controlling interests Total equity NON-CURRENT LIABILITIES Borrowings Derivative financial instruments Deferred income Deferred gain on sale and lease back assets Other payables Provision for liabilities Deferred tax liabilities Total non-current liabilities NON-CURRENT ASSETS Intangible assets Property, plant and equipment Joint ventures Associates Available-for-sale financial assets Derivative financial instruments Long term receivables Deferred tax assets Total non-current assets CURRENT ASSETS Inventories Trade and other receivables Derivatives financial instruments Financial assets at fair value through profit or loss Tax recoverable Deposits, cash and bank balances LESS: CURRENT LIABILITIES Trade and other payables Deferred gain on sale and lease back assets Borrowings Derivative financial instruments Current tax liabilities Dividend payable Total current liabilities Net current liabilities Net assets per share attributable to owners of the Company (sen) 31/12/2016 RM'000 Audited 13,063,008 12,530,570 25,593,578 6,129,845 31,723,423 8,971,415 4,081,106 10,528,131 23,580,652 5,039,552 28,620,204 14,292,233 1,212,201 222,359 950,960 1,595,821 478,679 1,791,431 20,543,684 52,267,107 15,135,472 1,165,857 245,894 1,053,855 1,581,353 499,720 2,241,506 21,923,657 50,543,861 22,843,969 26,899,110 70,263 8,425,563 62,067 127,719 102,519 244,968 58,776,178 23,153,033 27,466,131 109,254 8,400,152 63,925 398,318 117,684 291,633 60,000,130 153,191 4,775,392 57,459 15 185,023 7,373,615 12,544,695 174,747 4,779,575 2,735 18 199,111 5,332,414 10,488,600 12,057,749 136,166 5,806,718 160,351 623,561 269,221 19,053,766 (6,509,071) 52,267,107 12,027,136 140,817 7,124,409 162,650 489,857 19,944,869 (9,456,269) 50,543,861 285 263 (The above Consolidated Statement of Financial Position should be read in conjunction with the Audited Financial Statements for the financial year ended 31 December 2016)
3. AXIATA GROUP BERHAD (242188-H) UNAUDITED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL PERIOD ENDED 30 JUNE 2017 Attributable to equity holders of the Company Note At 1 January 2017 Share capital '000 Share capital Share premium Currency translation differences Capital contribution reserve Merger reserve Hedging reserve ESOS and RSA reserve Actuarial reserve AFS reserve Other reserve Retained earnings Total NCI Total equity RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 8,971,415 8,971,415 4,081,106 2,288,800 16,598 346,774 135,647 11,107 35,998 9,335,025 23,580,652 5,039,552 28,620,204 - - - - - - - - - - - 646,221 646,221 94,889 741,110 - - - (470,439) (1,070) - - - - - - - - (470,439) (1,070) (190,177) - (660,616) (1,070) - - - 32,002 - - - - - - - - 32,002 -Net cash flow hedge - - - (439,507) - - - (28,688) - - - - - (439,507) (28,688) -Net investment hedge -Actuarial gain, net of tax - - - - - (41,267) - - 1,899 - - - (41,267) 1,899 -Revaluation of AFS Total comprehensive income - - - - - (69,955) - 1,899 - 646,221 (1,358) 137,300 2,613 - 4,039 4,081,271 - - - - - - - - - -Reversal of reserve - - - - - - - - - - 81 - 81 -Dilution of equity interest in subsidiaries -Private placement of a subsidiary -Partial disposal of subsidiaries -Acquisition of a subsidiary - - - - - - - - - 40,087 18,884 - 91,175 1,229,275 766,797 - 91,175 1,270,086 772,802 - -Dividends payable to shareholders -Dividends paid to NCI - - - - - - - - - - - -Axiata Share Scheme: -value of employees' services - - - - - - - 6,499 - - - 2,613 8,974,028 6,283 4,091,593 13,063,008 16,598 346,774 13,006 34,640 Profit for the financial period (325,702) (1,316,116) Other comprehensive income: -Currency translation differences arising during the financial period: -subsidiaries -joint venture -associates Transactions with owners: -Issuance of new ordinary shares -Transition to no par value regime A(2)(i) A12(c) A12(c),(h) -transferred from ESOS and RSA reserve upon exercise/vest Total transaction with owners At 30 June 2017 Employees Share Option Scheme (“ESOS”) (439,507) 165 (4,081,271) (4,081,106) - 724 (12,879) - (12,155) 1,837,138 Restricted Share Awards (“RSA”) Available-for-sale (“AFS”) (395,657) (6,283) 216 135,863 (1,358) (1,358) (269,221) - 4,204 - (269,221) - (190,177) 199 32,002 (629,684) (28,489) 963 (41,267) 2,862 (94,126) (1,358) 43,174 - 4,204 - - 81 (94,925) 908,883 390,647 (2,123) (3,750) 2,178,969 1,163,449 (2,123) (18,063) (269,221) (18,063) - 6,499 - 6,499 59,052 1,818,026 (1,257,064) 11,799,272 1,875,626 25,593,578 1,184,419 6,129,845 3,060,045 31,723,423 Non-controlling interests (‘NCI’) (The above Consolidated Statement of Financial Position should be read in conjunction with the Audited Financial Statements for the financial year ended 31 December 2016)
4. AXIATA GROUP BERHAD (242188-H) UNAUDITED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL PERIOD ENDED 30 JUNE 2017 (CONTINUED) Attributable to equity holders of the Company Currency translation Share capital RM'000 At 1 January 2016 Profit for the financial period Other comprehensive income: -Currency translation differences arising during the financial period: -subsidiaries -joint venture -associates -Net cash flow hedge -Net investment hedge -Actuarial reverse -Revaluation of AFS Total comprehensive income Transaction with owners: -Issuance of new ordinary shares -Share issue expense -Acquisition of subsidiaries -Dilution of equity interest in subsidiaries -Rights issue by a subsidiary -Dividends paid to NCI -Dividends payable to shareholders -Axiata Share Scheme: -value of employees' services -transferred from ESOS and RSA reserve upon exercise/vest Total transactions with owners At 30 June 2016 Capital Share contribution premium differences reserve RM'000 RM'000 RM'000 Merger reserve RM'000 Hedging reserve RM'000 Actuarial reserve RM'000 ESOS and RSA reserve RM'000 AFS reserve RM'000 (255,992) (92) 130,229 3,367 - - Other reserve RM'000 Retained earnings RM'000 Total RM'000 (172,753) 10,223,278 23,525,269 2,199,075 25,724,344 8,816,858 3,485,891 931,111 16,598 346,774 - - - - - - - - - - - - - - - - - - - 44,720 - - (23,828) 20,892 151,121 1,610 1,624 - 4,855 (171) - (283,945) (2,334) (200,419) (486,698) (486,698) - - - - - 4,962 6,586 8,823,444 18,866 23,550 3,509,441 444,413 16,598 346,774 - (1,204) (14,528) (15,732) (271,724) - (1,731) (1,731) (1,823) - (1,757) (1,757) NCI RM'000 Total equity RM'000 - 557,190 557,190 76,278 633,468 - 557,190 (283,945) (2,334) (200,419) (486,698) (1,204) (14,528) (1,731) (1,757) 51,272 (34,644) (34,644) (241) (875) 40,518 (318,589) (2,334) (200,419) (521,342) (1,445) (14,528) (2,606) (1,757) 91,790 6,479 (171) (5,248) (5,248) (16,036) (16,036) (1,058,806) (1,058,806) - 44,720 - (1,080,090) (1,029,062) (172,753) 9,700,378 22,547,479 6,479 (171) 847,239 847,239 32,202 26,954 678,383 662,347 (15,810) (15,810) - (1,058,806) - 44,720 1,542,014 3,781,607 512,952 26,329,086 (The above Consolidated Statement of Financial Position should be read in conjunction with the Audited Financial Statements for the financial year ended 31 December 2016)
5. AXIATA GROUP BERHAD (242188-H) UNAUDITED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE FINANCIAL PERIOD ENDED 30/6/2017 30/6/2016 RM'000 RM'000 Receipt from customers 11,380,713 10,341,322 Payment to suppliers and employees (6,964,585) (7,007,385) Payment of finance costs (665,341) (521,701) Payment of income taxes (net of refunds) (320,741) CASH FLOWS FROM OPERATING ACTIVITIES Proceeds from disposal of property, plant and equipment Proceeds from disposal of intangible assets Purchase of property, plant & equipment Acquisition of intangible assets Proceed from sale and lease back transactions of a subsidiary Investments in subsidiaries (net of cash acquired) (388,456) 3,430,046 2,423,780 12,818 7,463 (2,969,087) (64,615) - 767 (2,043,292) (52,357) 564,140 (4,905,618) Investments in deposits maturing more than three (3) months 140,990 579,376 Investment in associates (100,371) (51,584) (20,149) (41,103) Additional investment in associates Investment in a joint venture Capital injection in a joint venture Net proceed from partial disposal of subsidiaries Settlement of deferred purchase consideration of investment in subsidiaries Other investment Dividends received from associates Net advance to employees Interests received CASH FLOWS USED IN INVESTING ACTIVITIES Proceeds from issuance of shares under Axiata Share Scheme Share issue expense - (384) - (96,162) 1,163,449 (19,295) (700) 49,409 (346) 91,939 (1,715,958) 4,204 - (54,794) 63,756 (407) 66,950 (5,963,249) 6,479 (171) Proceeds from borrowings 3,715,163 4,930,915 Repayments of borrowings (5,890,397) (1,243,113) Proceeds from Sukuks Net proceed from private placement of a subsidiary 712,860 1,989,687 2,178,969 - Net proceed from rights issue of a subsidiary - 662,347 Proceed from sale and lease back transactions of a subsidiary - 531,236 Repayment of finance lease creditors (94,115) (47,416) Dividends paid to non-controlling interests (103,161) CASH FLOWS FROM FINANCING ACTIVITIES 523,523 6,814,154 2,237,611 3,274,685 NET INCREASE IN CASH AND CASH EQUIVALENTS NET DECREASE/(INCREASE) IN RESTRICTED CASH AND CASH EQUIVALENT 352,814 EFFECT OF EXCHANGE RATE CHANGES (62,882) (15,810) (585,787) (60,933) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE FINANCIAL PERIOD 4,649,422 4,560,665 CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL PERIOD 7,176,965 7,188,630 (The above Consolidated Statement of Cash Flow should be read in conjunction with the Audited Financial Statements for the financial year ended 31 December 2016)
6. AXIATA GROUP BERHAD (242188-H) UNAUDITED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED) FOR THE FINANCIAL PERIOD ENDED 30/6/2017 30/6/2016 RM'000 RM'000 Total deposits, cash and bank balances 7,373,615 8,100,628 Less: - Deposit pledged and escrow account (45,650) (44,270) - Deposit on investment in subsidiaries (15,749) (715,585) - Deposits maturing more than three (3) months (65,722) (106,676) - Bank overdrafts CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL PERIOD (69,529) 7,176,965 (45,467) 7,188,630 (The above Consolidated Statement of Cash Flow should be read in conjunction with the Audited Financial Statements for the financial year ended 31 December 2016)
7. AXIATA GROUP BERHAD (242188-H) 1. PART A: EXPLANATORY NOTES PURSUANT TO MALAYSIAN FINANCIAL REPORTING STANDARD 134 Basis of Preparation The unaudited interim financial statements for the financial period ended 30 June 2017 of the Group have been prepared in accordance with the International Financial Reporting Standards compliant framework, Malaysian Financial Reporting Standards (“MFRS”), MFRS 134 “Interim Financial Reporting”, Paragraph 9.22 and Appendix 9B of the Bursa Malaysia Securities Berhad (“Bursa Securities”) Main Market Listing Requirements (“Main LR”), and should be read in conjunction with the Group’s audited financial statements for the financial year ended 31 December 2016 (“2016 Audited Financial Statements”). 2. Accounting Policies The accounting policies and method of computation applied in the unaudited interim financial statements are consistent with those used in the preparation of the 2016 Audited Financial Statements except for the following: (i) Companies Act 2016 The Companies Act 2016 (“New Act”) was enacted to replace the Companies Act 1965 becomes effective on 31 January 2017. Amongst the key changes introduced in the New Act which affecting the unaudited interim financial statements of the Company during the current quarter and financial period to date is as below: (a) (b) (c) removal of the authorised share capital; shares of the Company will cease to have par or nominal value; and the Company’s share premium account had become part of the Company’s share capital. Consequently, the Company reclassified the share premium reserve as at 31 January 2017 to the share capital pursuant to the transitional provision set out in Section 618(2) of the New Act. Notwithstanding this provision, the Company may within twenty four (24) months from the commencement of the New Act, use this amount for the purposes as set out in Section 618(2) of the New Act. There is no impact on the numbers of ordinary shares in issue or the relative entitlement of any of the members as a result of this transition. The above mentioned financial impact to the Company as at 31 January 2017 is as below: Share capital Share premium As at 1 January 2017 RM’000 New issues RM’000 As at 31 January 2017 RM’000 8,971,415 4,081,106 65 165 8,971,480 4,081,271 7 Changes in Companies Act 2016 RM’000 As at 31 January 2017 RM’000 4,081,271 13,052,751 (4,081,271) -
8. AXIATA GROUP BERHAD (242188-H) 2. Accounting Policies (continued) (ii) Adoption of amendments to MFRS (continued) The adoption of amendments to existing standards that are applicable to the Group for the financial period beginning 1 January 2017 as set out below.   Amendments to MFRS 107 Amendments to MFRS 112  Annual Improvements to MFRSs Disclosure Initiative Recognition of Deferred Tax Assets for Unrealised Losses 2014-2016 Cycle The adoption of the amendments to existing standards did not have any significant impact to the Group during the financial period to date. 3. Seasonal or Cyclical Factors The operations of the Group were not significantly affected by any seasonal or cyclical factors. 4. Significant Unusual Items Affecting Assets, Liabilities, Equity, Net Income or Cash Flows The Group’s performance for the current quarter and financial period to date has taken into account of the following: (a) During the current quarter, the Group recognised additional goodwill of RM263.4 million (NPR7.2 billion) in conjunction with the finalisation of purchase price allocation exercise; (b) Robi Axiata Limited (“Robi”), a subsidiary of the Group recognised a total tax credit related to a subsidiary acquired in 2016 amounting to RM102.5 million (BDT1.9 billion); and (c) During the current quarter and financial period to date, the Group recognised net foreign exchange gains of RM69.3 million and RM 79.9 million respectively mainly arising from the revaluation of USD borrowings and payables. Other than the above and as disclosed in Part A, 12 of this announcement, there were no other unusual items affecting assets, liabilities, equity, net income or cash flows due to their nature, size or incidence for the financial period ended 30 June 2017. 5. Estimates The preparation of unaudited interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. There were no changes in estimates of amounts reported in prior financial years that may have a material effect in the current quarter and financial period to date. In preparing the unaudited interim financial statements, the significant judgements made by the management in applying the Group’s accounting policies and the sources of estimates uncertainty were consistent as those applied to 2016 Audited Financial Statements. 8
9. AXIATA GROUP BERHAD (242188-H) 6. Issues, Repurchases and Repayments of Debt and Equity Securities (a) During the financial period to date, the Company issued new ordinary shares under the Axiata Share Scheme as below: Total ordinary shares of the Company issued '000 RM'000 Description ● ● Performance-Based Employee Share Option Scheme ("ESOS") at an exercise price of either RM1.81, RM3.15, RM3.45 and RM5.07 Restricted Share Awards at an issuance price from RM3.45 to RM6.09 being the fair value of RSA issued. Total (b) 1,239 5,412 1,374 2,613 5,075 10,487 On 15 February 2017, the Company has early settled a total amount of RM800.9 million (USD180.0 million) under its loan undertaken with Bank of Tokyo Mitsubishi in 2016. Subsequently the Company refinanced its existing loan balance of RM2,143.9 million (USD482.0 million) which was due for settlement on 15 March 2017 with Hong Kong and Shanghai Banking Corporation (“HSBC”) and Oversea-Chinese Banking Corporation at respective amount of RM1,112.0 million (USD250.0 million) and RM1,031.9 million (USD232.0 million). Both loans have tenure of twelve (12) months from the date of the Facility Agreement and carry contractual interest rate of LIBOR + applicable interest. On 14 June 2017, the Company early settled a total amount of RM281.2 million (USD66.0 million) under its loan undertaken with HSBC above. (c) On 28 April 2017, XL issued Sukuk Ijarah namely Shelf Sukuk Ijarah I XL Axiata Tranche II Year 2017 amounting to RM712.9 million (IDR 2.18 trillion) with maturity period of 370 (three hundred 7ty) days up to 10 (ten) years and was registered in Indonesia Stock Exchange on 2 May 2017. Aside from the above, there were no other significant unusual issues, repurchases and repayments of debt and equity securities during the financial period ended 30 June 2017. 7. Dividend paid There is no dividend paid by the Company during the financial period to date except for the dividend paid by the Company after the interim period as disclosed in part A, Note 11(b) of this announcement. 9
10. AXIATA GROUP BERHAD (242188-H) 8. Segmental Information For the financial period ended 30 June 2017 Malaysia RM'000 Total operating revenue Inter-segment* External operating revenue Earnings before interest, tax, depreciation and amortisation ("EBITDA") Interest income Interest expense Depreciation of property, plant & equipment ("PPE") Amortisation of intangible assets Joint ventures: - share of results (net of tax) Associates: - share of results (net of tax) - loss on dilution of equity interests Impairment of PPE, net of reversal Other non-cash income/(expense) Taxation Segment profit/(loss) for the financial period 1 Consolidation adjustments/ Others1 eliminations RM'000 RM'000 Indonesia Bangladesh RM'000 RM'000 Sri Lanka RM'000 Nepal RM'000 Cambodia RM'000 3,225,669 (5,350) 3,220,319 3,597,139 (26,148) 3,570,991 1,775,848 (15) 1,775,833 1,307,243 (9,545) 1,297,698 1,175,049 (10,451) 1,164,598 615,390 (4,773) 610,617 967,434 (667,952) 299,482 1,102,440 31,389 (108,825) 1,339,442 26,946 (271,704) 296,957 3,127 (36,301) 444,001 3,314 (29,173) 784,515 12,821 (27,819) 310,546 3,941 (1,562) 143,602 54,948 (223,548) 6,357 (42,107) 42,312 4,427,860 94,379 (656,620) (416,295) (57,413) (1,121,114) (31,844) (322,915) (129,869) (249,795) (17,798) (178,042) (47,120) (91,503) (2,535) (146,839) (12,502) 11,692 (152,612) (2,514,811) (451,693) (1,516) (30,964) - (3,987) - (36,467) - - - - Total RM'000 12,663,772 (724,234) 11,939,538 (11,899) 151,050 (136,947) 17,589 78,056 38,641 8,547 (29,226) 153,229 (559) 7,734 (21,520) (23,922) (36,358) (142,745) 2,004 (44,265) (85,735) (9,816) 285,814 (69,970) (254,728) 3,488 (89,646) (9,816) 25,323 175,092 (222,491) 551,984 45,048 (56,451) 112,282 365,252 176,626 (68,033) (385,598) 741,110 Share of results of associates are mainly contributed by Idea Cellular Limited (-RM134.6 million) and M1 Limited (RM60.3 million). 10
11. AXIATA GROUP BERHAD (242188-H) 8. Segmental Information (continued) For the financial period ended 30 June 2016 Consolidation adjustments/ Others2 eliminations RM'000 RM'000 Malaysia RM'000 Indonesia RM'000 Bangladesh RM'000 Sri Lanka RM'000 Nepal RM'000 Cambodia RM'000 Total operating revenue Inter-segment* External operating revenue 3,340,767 (3,126) 3,337,641 3,321,214 (16,620) 3,304,594 1,268,400 (31) 1,268,369 1,191,104 (18,483) 1,172,621 484,225 (6,405) 477,820 513,328 (12) 513,316 501,213 (256,636) 244,577 EBITDA Interest income Interest expense Depreciation of PPE Amortisation of intangible assets Joint venture: - share of results (net of tax) Associates: - share of results (net of tax) - loss on dilution of equity interests Impairment of PPE, net of reversal Other non-cash income/(expenses) Taxation 1,202,322 43,504 (91,742) (378,394) (32,141) 1,367,911 (3,900) (298,803) (1,226,086) (37,110) 417,319 2,912 (22,412) (303,167) (62,174) 397,091 6,001 (16,860) (201,959) (14,656) 310,404 (58,316) (27,679) 258,662 4,421 (3,524) (74,196) (2,132) (13,079) 70,409 (171,573) (47,726) (10,219) (593) (33,103) - (21,551) 19,193 (186,063) (23,815) 318,920 2,862 (548) (1,249) (11,726) (30) 5,409 (13,489) (21,887) 10,421 (78,785) 554,535 66,876 18,955 139,620 156,045 Segment profit/(loss) for the financial period 2 - - - 456 (58,809) 54,665 334 (56,645) Total RM'000 10,620,251 (301,313) 10,318,938 3,941,086 64,538 (550,249) (2,289,510) (242,756) (6,768) - (40,464) (249) (34,966) 150,334 (1,732) 1,168 (244,957) (11,190) (118,798) 13,551 128,753 (1,732) (17,786) (30,208) (328,204) 148,016 (285,333) (165,246) 633,468 Share of results of associates are mainly contributed by Idea Cellular Limited (RM79.9 million) and M1 Limited (RM71.0 million). * Inter-segment operating revenue has been eliminated at the respective segment operating revenue. The inter-segment operating revenue was entered into in the normal course of business and at prices available to third parties or at negotiated terms. 11
12. AXIATA GROUP BERHAD (242188-H) (Incorporated in Malaysia) 9. Valuation of PPE The Group does not adopt a revaluation policy on its PPE. 10. Acquisitions of PPE During the financial period to date, the Group acquired additional PPE amounting to RM2,897.8 million mainly for its telecommunication network equipment and capital work in progress. 11. Events after the Interim Period (a) Incorporation of Adknowledge Asia Philippines Inc Adknowledge Asia Pacific Pte Ltd, a subsidiary of the Group had on 10 July 2017 completed the incorporation of Adknowledge Asia Philippines Inc. (“AAP”) (Registration No. CS201722696), a private company limited by shares, in the Republic of the Philippines, under Batas Pambansa Blg. No. 68 otherwise known as the Corporation Code of the Philippines. AAP was incorporated with an authorised share capital of PHP40.0 million divided into 320,000 ordinary shares of PHP125 each. The issued and paid-up share capital of AAP is PHP10.0 million and its intended principal activity is to engage in the business of providing technology and software solutions. (b) Dividend paid by the Company On 12 July 2017, the Company paid a total final tax exempt dividend of 3 sen under single tier in respect of financial year ended 31 December 2016 per ordinary share of the Company amounting to RM269.2 million. Out of the total cash distribution, a total of RM113.2 million was converted into 24,087,706 new ordinary shares of the Company at the conversion price of RM4.70 per ordinary share under the Dividend Reinvestment Scheme of the Company. (c) Acquisition of Tanzanite Tower Private Limited (“TTPL”) On 3 August 2017, edotco Pakistan Limited, a wholly-owned subsidiary of edotco Group Sdn Bhd (“edotco Group”) completed the acquisition of 100% equity interest in TTPL for a purchase consideration of USD88.9 million (equivalent to RM381.0 million) after adjustments provided under the terms of the Sale and Purchase Agreement. In accordance with the terms of the Share and Purchase Agreement (“SPA”), TTPL had on the Completion Date entered into a Share Pledge Agreement (“PA”) with HB Offshore Investments Limited (“HBOIL”), the owner of wi-tribe Pakistan Limited (“wi-tribe”), provider of wireless broadband services in Islamabad, Rawalpindi, Lahore, Karachi, and Faisalabad. Under the PA, TTPL shall be the beneficiary (by way of security) for all the wi-tribe shares held by HBOIL, being the only issued capital of wi-tribe, as security for wi-tribe’s indebtedness and obligations to TTPL under the Amended and Restated Tower Space Master License Agreement dated 28 June 2016 (as amended) for a limited period of time between TS PK and wi-tribe. 12
13. AXIATA GROUP BERHAD (242188-H) (Incorporated in Malaysia) 11. Events after the Interim Period (continued) (d) Acquisition of Suvitech Co. Ltd (“Suvitech”) On 15 May 2017, Axiata Business Services Sdn Bhd (“ABS”), a wholly-owned subsidiary of the Company entered into a Share Sale and Purchase Agreement for the acquisition of 65.00% of the issued share capital of Suvitech Co. Ltd at a consideration of USD11.1 million (equivalent to RM47.9 million). The acquisition was completed by ABS through its wholly-owned subsidiary, Xpand Investments (Labuan) Limited (“Xpand Labuan”) on 16 August 2017. There was no other significant event after interim period that requires disclosure and/or adjustment as at 23 August 2017. 12. Effects of Changes in the Composition of the Group (a) Incorporation of Axiata Digital Ecode Sdn Bhd (“ADE”) Axiata Digital Services Sdn Bhd (“ADS”), a wholly-owned subsidiary of the Company, had on 9 January 2017 completed the incorporation of ADE (Company No. 1214970-T), a private company limited by shares, under the Companies Act, 1965. The issued and paid-up share capital of ADE is RM2 and its intended principal activities are to carry out the business of researching and developing internet services and mobile applications. The incorporation above did not have any significant impact to the Group during the financial period to date. (b) Acquisition of 31.01% equity interest in edotco Bangladesh Co. Ltd (“edotco BD”) by edotco Group from Robi On 18 January 2017, the call option exercise to acquire 31.01% of the issued and paid up capital of edotco BD pursuant to the sale and purchase agreement dated 5 November 2014 was completed by edotco Group. Accordingly, the Group’s effective interest in edotco BD increased from 84.03% to 93.74%. The Group recorded an increase of RM90.2 million in the consolidated retained earnings and a decrease in non-controlling interests amounting to RM90.2 million during the financial period to date. 13
14. AXIATA GROUP BERHAD (242188-H) (Incorporated in Malaysia) 12. Effects of Changes in the Composition of the Group (continued) (c) Private placement of edotco Group and share divestment on edotco Group On 27 January 2017, the private placement of edotco Group and the share divestment on edotco Group by the Company were completed with: (i) 409,904,436 edotco Group’s ordinary shares were issued to Innovation Network Corporation of Japan (“INCJ”), at a cash consideration of USD300.0 million (RM1,329.1 million); and (ii) 273,269,624 edotco Group’s ordinary shares were disposed to Mount Bintang Ventures Sdn Bhd at a gross purchase consideration of USD200.0 million (RM888.7 million). In conjunction with the private placement above, edotco Group had further issued the following: (i) On 18 April 2017, a total 136,634,813 ordinary shares were issued to INCJ for a cash consideration of USD100.0 million (RM435.0 million); and (ii) On 28 April 2017, a total 136,634,813 ordinary shares were issued to Kumpulan Wang Persaraan (Diperbadankan) for a cash consideration of USD100.0 million (RM441.0 million). With the completion of the transactions above, the Group’s effective shareholding in edotco Group decreased from 100.00% to 62.37%. The Group recorded the following in the consolidated statement of changes in equity during the financial period to date as below: Consolidated statements of changes in equity Private placement Divestment (d) Forex exchange reserves RM’000 Other reserves RM’000 Retained earnings RM’000 Noncontrolling interests RM’000 Total RM’000 724 (1,592) 40,087 18,884 1,229,275 590,316 908,883 278,586 2,178,969 886,194 Acquisition of 12.28% equity interest in Milvik AB ADS, had on 3 March 2017 entered into a Subscription Agreement with Kinnivek New Ventures AB, Milicom Holding 100 B.V., Leapfrog Financial Inclusion (Luxembourg) S.a r.l, Future Holdings Limited, Anders Olsson and the Pensioneer Trustee Company (Guernsey) Limited, Gustaf Agartson and Mathilda Strom for the acquisition of 12.28% or 1,523,116 ordinary shares of Milvik Ab at a consideration of USD16.8 million (equivalent to RM74.2 million). The above transaction was completed on 23 March 2017 and effectively Milvik AB became an associate of the Group. The investment above did not have significant impact to the Group during the financial period to date. 14
15. AXIATA GROUP BERHAD (242188-H) (Incorporated in Malaysia) 12. Effects of Changes in the Composition of the Group (continued) (e) Acquisition of 9.60% equity interest in Unlockd Media Pty Ltd (“Unlockd”) ADS, had on 6 March 2017 entered into a Share Subscription Agreement (“SSA”) with Unlockd for the acquisition of the following equity interests: (i) Tranche 1: 127,258 ordinary shares at a consideration of USD5.0 million (equivalent to RM21.6 million). In addition, 151,370 ordinary shares at a consideration of USD5.9 million (equivalent to RM25.74 million) in exchange for assets held by ADS. Total acquisition represents 9.6% or 278,628 ordinary shares; and (ii) Tranche 2: 76,355 ordinary shares at a consideration of USD3.0 million. ADS shall further subscribe for Tranche 2 subject to ADS achieving the additional conditions precedent as per the SSA. The acquisition of Tranche 1 was completed by ADS on 19 May 2017 and effectively Unlockd became an associate of the Group. The investment above did not have significant impact to the Group during the current quarter and financial period to date. (f) Additional investment in Headstart (Private) Limited (“Headstart”) Digital Holdings Lanka (Private) Limited (“DHL”), a subsidiary of Dialog Axiata Plc, proceeded with the conversion to equity the ‘Bond type B’ and ‘Bond type C’ in Headstart, consisting of 414 ordinary shares on 15 March 2017. Subsequent to the said conversion, the total shareholding of DHL in Headstart increased from 26.00% to 43.37%. The additional investment above did not have significant impact to the Group during the financial period to date. (g) Additional investment in Localcube Commerce Private Limited (“Localcube”) The Group via Axiata Investments (Mauritius) Limited (“AIM”), a wholly-owned subsidiary of ADS had on 12 May 2017, further subscribed the remaining 1,559 Compulsorily Convertible Preference Shares of Localcube at par value of INR10 per share resulting in AIM’s total shareholding of 29.65% of issued and paid up capital of Localcube for a total consideration of RM13.9 million (USD 3.2 million). The additional investment above did not have any significant impact to the Group during the current quarter and financial period to date. 15
16. AXIATA GROUP BERHAD (242188-H) (Incorporated in Malaysia) 12. Effects of Changes in the Composition of the Group (continued) (h) Disposal of 10.00% equity interest in Axiata (Cambodia) Holdings Limited (formerly known as Glasswool Holdings Limited) (“ACH”) On 19 May 2017, the Company and its wholly owned subsidiary, Axiata Investments (Cambodia) Limited (“AIC”) entered into a SPA with M&Y Asia Telecom Holdings Pte. Ltd. (“MY Asia”) and Mitsui & Co., Ltd. (“Mitsui”) for the disposal by AIC of 226 ordinary shares of USD1 each in ACH, the holding company of Smart Axiata Co., Ltd, representing 10.00% of the total issued and paid-up share capital of ACH, for a total cash consideration of USD66.0 million (RM283.0 million) (“Initial Sale”). Mitsui and the Company are the guarantors for MY Asia’s and AIC’s obligations, respectively under the SPA. Pursuant to the Initial Sale, AIC also entered into an Amended and Restated Shareholders Agreement with MY Asia and Southern Coast Ventures Inc. (“SCV”) to govern their relationship as shareholders of ACH which includes inter-alia, a call option to MY Asia for further 10.00% stake in ACH. On 1 June 2017, the intial sale was completed. AIC and MY Asia now respectively holds 82.48% and 10.00% interest in ACH, with the balance 7.50% held by SCV. The Group recognised an increase of RM176.5 million in the consolidated retained earnings and non-controlling interests amounting to RM112.1 million with the decrease in consolidated foreign exchange reserve of RM11.3 million. (i) Incorporation of Xpand Labuan ABS, a wholly-owned subsidiary of the Company had on 6 June 2017 completed the incorporation of Xpand Labuan (Company No. LL13757), a private company limited by shares, in the Federal Territory of Labuan, Malaysia under the Labuan Companies Act, 1990. Xpand Labuan was incorporated with an issued and paid-up share capital of USD2. The intended principal activity of Xpand Labuan is an investment holding company. The incorporation above did not have any significant impact to the Group during the current quarter and financial period to date. (j) Dilution on equity interest in Idea Cellular Limited (“Idea”) During the current quarter and financial period to date, the Group’s equity interest in Idea, decreased from 19.77% to 19.74% following the issuance of new ordinary shares under Idea’s ESOS. The dilution above has no significant impact to the Group during the current quarter and financial period to date. Other than above, there were no other changes in the composition of the Group for the financial period ended 30 June 2017. 16
17. AXIATA GROUP BERHAD (242188-H) (Incorporated in Malaysia) 13. Significant Changes in Contingent Assets or Contingent Liabilities Other than as disclosed in Note Part B,10 of this announcement, there has been no significant change in contingent assets or contingent liabilities of subsidiaries and associates from that disclosed in the 2016 Audited Financial Statements. 14. Capital Commitments Group 30/6/2017 RM'000 As at 30/6/2016 RM'000 Commitments in respect of expenditure approved and contracted for 2,845,286 1,730,702 Commitments in respect of expenditure approved but not contracted for 2,017,809 2,195,241 17
18. AXIATA GROUP BERHAD (242188-H) (Incorporated in Malaysia) 15. Financial Instruments At Fair Value Measurements The Group’s financial instruments that were measured at fair value as at reporting date were as follow: - Derivative financial instruments (assets and liabilities); and - Trading securities The Group measured the financial instruments based on:  Level 1 (traded in active markets): Quoted market prices  Level 2 (not traded in active markets): Valuation techniques such as quoted market prices or dealer quotes for similar instruments, present value of the estimated future cash flows based on observable market curves and forward exchange rates at reporting date with the resulting value discounted back to present value  Level 3: Unobservable inputs The Group’s derivative financial instruments as at 30 June 2017 were grouped as below: Derivatives Financial Instruments 2017 Level 1 RM'000 Level 2 RM'000 2016 Level 3 RM'000 Total RM'000 Level 1 RM'000 Level 2 RM'000 Level 3 RM'000 Total RM'000 Assets Financial assets at fair value through profit or loss: -Trading security 15 - - 15 20 - - 20 Financial assets at AFS: -Equity securities - - 62,067 62,067 - - 29,433 29,433 Non-hedging derivatives - 182,045 - 182,045 - 135,404 - 135,404 Derivative used for hedging - 3,133 - 3,133 - 11,323 - 11,323 Liabilities Non-hedging derivatives Derivatives used for hedging Total - (1,340,612) - (1,340,612) - (203,292) - (203,292) 15 (31,940) (1,187,374) 62,067 (31,940) (1,125,292) 20 (2,163) (58,728) 29,433 (2,163) (29,275) 18
19. AXIATA GROUP BERHAD (242188-H) 1. PART B: EXPLANATORY NOTES PURSUANT TO APPENDIX 9B OF THE LISTING REQUIREMENTS OF BURSA SECURITIES Review of Performance (a) Quarter-on-Quarter (Q2’17 vs Q2’16) Current Year Quarter Preceding Year Corresponding Quarter 30/6/2017 30/6/2016 RM’million RM’million Revenue EBITDA PAT Variance RM’million % 6,058.6 2,273.9 5,310.1 2,065.7 748.5 208.2 14.1 10.1 479.1 232.3 246.8 106.3 188.9 218.3 115.5 PATAMI 407.2 1 PAT : Profit after tax 2 PATAMI : Profit after tax and minority interest Group Performance Revenue increased by 14.1% to RM6,058.6 million in the current quarter from RM5,310.1 million in the second quarter 2016, as a result of an increase in revenue contribution from all its major operating companies except for the operation in Malaysia. Strong performance in revenue was fuelled by data growth with data revenue now contributing 44.1% of service revenue as compared to 32.3% in Q2’16. EBITDA increased by 10.1% quarter-on-quarter driven by revenue growth as well as the Group’s internal cost optimisation drive. PAT was up by more than 100% to RM479.1 million for the period largely attributed to improved profit contribution from almost all operating countries. In 2016, profit was dampened by forex translation loss arising from the weakened MYR in 2016 against the US Dollar as compared to the same period in 2017. Share of results of associates and joint ventures however decreased by more than 100% recording a loss of RM95.6 million. The decline was mainly a result of loss in India amounting to RM109.4 million as compared to a profit of RM14.9 million in Q2’16 as the overall India market continues to be impacted by the new entrant’s aggressive price competition and service. PATAMI increased by more than 100% to RM407.2 million on the back of contribution by all operating companies. Geographical Highlights • Malaysia: Revenue declined by 3.5% to RM1,619.6 million mainly due to the decline in legacy voice and SMS revenue. As a result, EBITDA decreased by 2.3%. PAT increased by 37.6% to RM357.5 million, mainly from a one-off intergroup gain from disposal of one of its associates eliminated at Group. • Indonesia: Revenue grew 16.7% to RM1,843.6 million on the back of solid performance in data – growing 92.2%. EBITDA increased by 7.2% to RM707.3 million. PAT in current quarter increased by 99.1% mainly attributable to lower depreciation and amortisation charges. 19
20. AXIATA GROUP BERHAD (242188-H) 1. Review of Performance (continued) (a) Quarter-on-Quarter (Q2’17 vs Q2’16) (continued) Geographical Highlights (continued) • Bangladesh: Revenue grew by 42.3% from the merged Robi-Airtel entity driven by larger subscriber base and strong performance in data which registered more than 100% growth as compared to prior year. EBITDA decreased by 30.2% to RM142.9 million due to the deconsolidation of edotco Bangladesh. PAT increased by more than 100% as compared to a loss position in Q2’16, contributed by deferred tax credit adjustment of RM102.5 million. • Sri Lanka: Total revenue grew by 13.4% backed by data revenue growth of 51.4%. EBITDA grew 19.6% to RM231.5 million. PAT for the quarter increased by 7.5% to RM66.9 million from higher revenue and EBITDA. • Nepal: Increase in revenue, EBITDA and PAT recorded following a full quarter consolidation as compared to preceding year corresponding quarter with the consolidation effective from 11 April 2016. • Cambodia: Revenue increased by 15.8% to RM297.7 million for Q2’17 mainly derived from strong performance in the data segment which saw a jump of 40.5% as compared to Q2’16. EBITDA grew 15.1% while PAT increased by 8.6% to RM82.3 million. (b) Year-on-Year (YTD’17 vs YTD’16) Revenue EBITDA Current Year To Date Preceding Year Corresponding Period 30/6/2017 30/6/2016 RM’million RM’million Variance RM’million % 11,939.5 4,427.9 10,318.9 3,941.1 1,620.6 486.8 15.7 12.4 PAT 741.1 633.5 107.6 17.0 PATAMI 646.2 557.2 89.0 16.0 Group Performance For the financial period to date 2017 (“YTD’17”), Group’s revenue increased by 15.7% to RM11,939.5 million from RM10,318.9 million as recorded in the same period last year. The rise in revenue was a result of contributions from all major operating companies with the exception of Malaysia. Strong performance in revenue was driven by data growth with data revenue contributing 42.6% of service revenue as compared to 31.7% in YTD’16. EBITDA increased by 12.4% attributable mainly to Nepal, Cambodia and Sri Lanka. 20