Axiata mulls paying dividend from 2011

SINGAPORE: Malaysia's second-largest mobile phone company Axiata Group Bhd is considering paying a dividend from 2011 as improving business conditions have helped bolster its balance sheet, its chief executive said today.

A likely payout to shareholders would be the first dividend from the company since its listing in 2008 after it was demerged from TELEKOM MALAYSIA BHD [].

"We have not made any decision... However, given the strength of our balance sheet, especially our cash and debt position, we are in good position to consider it from 2011 onwards," Axiata's CEO Datuk Seri Jamaludin Ibrahim told Reuters in an interview.

Axiata's 2009 net profit tripled to RM1.65 billion, helped by strong performance of its overseas subsidiaries in Indonesia and Bangladesh.

The firm, which has a market value of US$9.5 billion (RM32.01 billion), turned free cash flow positive for the first time in 2009 and slashed its gross debt-to-earnings before interest, tax, depreciation and amortisation (Ebitda) ratio to 2.4 times from 4.6 times.

Axiata recorded an Ebitda margin of 42.2% in the quarter ended December, up from 31.7% a year earlier, and compared to 41% recorded by Singapore Telecommunications (Singtel), Southeast Asia's biggest telecom firm.

"We believe we could maintain the Ebitda margin, of course the pressure point would come from the competition and also our own investment in mobile broadband," said Jamaludin.

Axiata has 120 million mobile subscribers across Asia, up 34% from a year earlier, with a presence in a number of countries including India, Indonesia, Singapore, Bangladesh, Cambodia and Sri Lanka.

The company has a 86.5% stake in Indonesia's third-largest mobile phone operator XL Axiata, which could become the country's number two player, after growing aggressively last year. XL Axiata has a free float of only 0.2% as Emirates Telecommunications Corp (Etisalat) controls another 13.3% stake in the Indonesian firm. — Reuters