Wednesday, August 24, 2011

Axiata shares retreat on challenging outlook

KUALA LUMPUR: Axiata Group Bhd shares dipped on Wednesday, Aug 24 after its president and group chief executive officer Datuk Seri Jamaludin Ibrahim said difficult operating conditions such as softening markets and the strengthening of the ringgit against most other currencies had continued in the second quarter of the year

The company said on Aug 23 that its net profit ''for the six months ended June 30, Axiata's fell 19% to RM1.21 billion from RM1.49 billion in the previous corresponding period.

This was despite its revenue increasing by 4.2% to RM7.99 billion from RM7.66 billion.

At 11.20am, Axiata fell seven sen to RM4.91 with 7 million shares traded.

Maybank Investment Bank Bhd in a note Aug 24 said that while Axiata's free cashflow generating capability remains strong, the outlook has turned more challenging than expected, both domestically and abroad.

'In the current environment of subdued revenue growth, and higher capex, we downgrade our call on Axiata to a Hold.

'With the downgrade in earnings, we have also lowered our sum-of-parts TP to RM5.50 (RM5.80 previously),' it said.

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