Axiata to unveil dividend policy by end of Q3

The telecommunication group also plans to sell as much as RM4.2 billion of Islamic bonds soon to refinance existing debts. 

 
AXIATA Group Bhd (6888) plans to announce its first dividend policy at the end of the third quarter, its top executives said.

The telecommunication group also plans to sell as much as RM4.2 billion of Islamic bonds soon to refinance existing debts.

President and chief executive officer Datuk Seri Jamaludin Ibrahim said while Axiata is currently a growth-based company, over time it may also turn into a dividend-play stock.

"We want to offer both growth and dividends to our shareholders. We will work out a new dividend policy by the end of the third quarter.
It will be announced after the third quarter," Jamaludin said after Axiata's annual general meeting in Kuala Lumpur yesterday.

He did not disclose more information on the dividend plans but said companies generally give out some 30 per cent of their profits as dividends to shareholders.

"(Our dividend rate) will be below pure dividend-play companies," Jamaludin added.

Axiata, operating in its third year under the current form after the demerger of Telekom Malaysia Bhd and its international and cellular businesses, is the the best performing stock among the Kuala Lumpur Composite Index's Top 30 companies.

As of June 21, it has risen 29 per cent against the benchmark KLCI's gain of only 5 per cent year todate.

Axiata also plans to issue Islamic bonds by end-July to take advantage of the relatively buoyant domestic credit markets, chief financial officer Datuk Yusof Annuar Yaacop said.

The group wants to lengthen its floating-rate sukuk from two years tenor currently to fixed-rate facilities with a tenor of five, seven and 10 years.

Jamaludin said Axiata has enough cash to finance its expansion and operations, without having the need to raise new loans.

As of last year, its cash reserve stood at RM4 billion.

The group has announced a RM3.6 billion capital expenditure (capex) for 2010 to bolster Celcom Axiata Bhd as well as its cellular companies in Indonesia, Sri Lanka and Bangladesh.

Of the RM3.6 billion, about RM1 billion will be for Celcom and another US$500 million (RM1.6 billion) for Indonesia's PT XL Axiata.

The rest of the capex will be shared by among others, its Sri Lankan outfit Dialog Telekom Plc and Axiata (Bangladesh) Ltd.

On Axiata's outlook in the second quarter, Jamaludin said: "We feel we are doing the right thing so far."

The group's net profit and operating revenue in the first quarter of 2010 grew 8 per cent and 2 per cent respectively to RM1.68 billion and RM3.8 billion.

Axiata posted a 44 per cent increase in net profit to RM1.64 billion and operating revenue of RM13.1 billion in 2009.

By Zuraimi Abdullah

Business Times