KUALA LUMPUR (Aug 28): Axiata Group Bhd's (KL:AXIATA) net profit from continuing operations rose in the second quarter ended June 30, 2026 (2QFY2026) from a year earlier mainly on the absence of goodwill impairment.
Net profit at Malaysia's biggest telecommunications company for the quarter stood at RM42.5 million from a year ago, according to a bourse filing on Friday.
The increase in earnings was mainly due to the absence of a RM329.6 million goodwill impairment of Link Net recorded in the prior-year quarter, partially offset by foreign exchange losses in 2QFY2026 compared to gains in 2QFY2025.
Quarterly revenue slipped 3.2% year-on-year to RM2.87 billion as foreign subsidiaries' currencies depreciated against the ringgit.
At constant currency, revenue increased 6.0%, driven by growth across all operating companies except Edotco and Link Net.
Axiata declared a first interim dividend of 5.5 sen per share for FY2026, higher than the five sen paid in the prior year.
For the six-month period, Axiata logged a net profit of RM316.32 million while revenue fell to RM5.67 billion.
Despite the foreign exchange headwinds, Axiata said its underlying performance improved on stronger contributions from its operating companies, merger synergies, operational improvements and disciplined cost management.
Its telecommunications businesses remained the group's main earnings and cash-generating drivers, while its technology portfolio continued to make progress towards profitability.
Link Net also showed signs of recovery in the second quarter, supported by subscriber additions and improving enterprise demand.
Axiata group chief executive officer and managing director Nik Rizal Kamil said stronger market structures, merger synergies, operational improvements and disciplined capital allocation were increasingly supporting earnings across the group.
“We are increasingly seeing the benefits of stronger market structures, merger synergies, operational excellence and disciplined capital allocation flowing through to stronger earnings, broader portfolio contributions and sustainable shareholder returns,” he said.
Nik Rizal said Axiata will continue to focus on improving its businesses while directing capital towards areas that can generate long-term value.
“As a smart asset manager, our role is to enable each business to realise its full potential while allocating capital where it can create the most value,” he said.
The 5.5 sen interim dividend also puts Axiata in line with its Axiata28 target of growing dividend per share by at least 10% annually. The group is also targeting high single-digit annualised total shareholder returns.
Following the completion of the merger between PT XL Axiata Tbk and PT Smartfren Telecom Tbk and the disposal of Edotco Investments Singapore Pte Ltd (EIS) last year, the group’s share of financial results of XLSMART is recorded under continuing operations from April 16, 2025, while EIS’ and XL’s financial results prior to the completion of transaction dates are presented as discontinued operations.