Celcom Axiata unit issues RM4.2bil sukuk

Group aims to streamline business functions, establish network-centric entity

Celcom Axiata Bhd has successfully placed out RM4.2bil nominal value unrated sukuk under a private offering as part of an internal exercise to streamline Celcom’s business functions and to establish a network-centric entity.

In a statement, Celcom said the sukuk issuance, with tenures ranging from five to 10 years, would be issued by its wholly-owned subsidiary Celcom Transmission (M) Sdn Bhd (CTX).

Celcom said this internal exercise was a component of its holding company Axiata’s groupwide initiative to transform its regional back-end operations to drive efficiencies, enhance cost savings and create value.

Under the exercise, Celcom’s telecommunication network business will be transferred to CTX.

It said CTX would not be tasked only with the day-to-day operations and management of the network business moving forward, but also to unlock its value and close technology-related gaps with tactical and strategic initiatives.

Celcom chief executive officer and director of CTX, Datuk Seri Shazalli Ramly, said the company would continue to look for opportunities to improve costs and operational efficiencies.

“Aside from having a differentiated sales and marketing strategy, we need to be equally focused and innovative on our network capabilities to drive financial performance.

“We believe this internal exercise to streamline Celcom’s business operations would be a critical step in achieving such an objective,” he said.

For the sukuk issuance, the Employees Provident Fund (EPF) will subscribe RM3.4bil while the balance of RM800mil will be taken up equally by CIMB Islamic Bank Bhd and Malayan Banking Bhd.

Meanwhile, CIMB Investment Bank Bhd and Maybank Investment Bank Bhd are the joint principal advisers, joint lead arrangers and joint lead managers for the sukuk issuance.

Present at the signing of the sukuk programme were EPF chief executive officer Tan Sri Azlan Zainol, CIMB Group chief executive officer Datuk Seri Nazir Razak and Malayan Banking Bhd president and chief executive officer Datuk Seri Abdul Wahid Omar.

AirAsia Q2 net profit 43% up on higher passenger load

AirAsia Bhd’s net profit jumped 43% to RM198.9mil for the second quarter ended June 30, from RM139.2mil a year ago, on the back of strong growth in passenger volumes, ancillary income and higher average fares.

Its revenue for the quarter was 26% higher at RM940.6mil from RM747.9mil a year ago. It reported earnings per share of 7.2 sen versus 5.9 sen a year ago.

For the six months ended June 30, AirAsia posted a net profit of RM423mil on revenue of RM1.82bil.

While AirAsia posted a record quarter, Malaysia Airlines posted a net loss of RM535mil due mainly to derivative losses from its fuel hedges. MAS’ revenue stood at RM3.2bil for the quarter ended June 30.

In a teleconference yesterday, group CEO Datuk Seri Tony Fernandes was confident of a strong second half for AirAsia. He sees a tremendous upside for its operations in Thailand and Indonesia while its ancillary income registered massive growth.

“Forward bookings are looking very good, The fourth quarter is traditionally our strongest quarter. To head into our strongest season on the back of a soaring first quarter and a record-breaking second quarter puts us in a fantastic position,” he said.

During the second quarter, the group’s core operating profit for the period was RM168.5mil, a 31% increase over RM128.4mil core operating profit achieved a year ago.

The core operating profit margin for the period was at 17.9%, 0.7 percentage point higher than the 17.2% core operating profit margin achieved a year ago.

“There were no unrealised translation gains in the quarter as gains from the slight strengthening of the ringgit were offset by losses from the change in the fair value of currency derivatives,” it said in the notes accompanying AirAsia’s financial results.

Commenting on its ancillary growth, Fernandes said: “We have actually reached our target of RM40 spending per pax that we set for the last quarter. We have unearthed a gushing revenue stream that can boost the bottom line and also serve as a buffer to rising fuel prices.”

He said baggage fees and AirAsia Cargo were significant contributors to ancillary income for the group.

Meanwhile, AirAsia’s associates Thai AirAsia Co and Indonesia AirAsia recorded good performance in the second quarter.

“Indonesia AirAsia has staged a strong turnaround and we expect greater things,” Fernandes said, adding that passenger volume grew by 10% year-on-year to 947,786 from 863,440 last year.

In the second quarter, Thai AirAsia recorded a net profit of RM4.9mil on revenue of RM267.4mil while Indonesia AirAsia’s net profit rose to RM39.6mil on revenue of RM233.2mil.

During the quarter, the group carried a total of 6.07 million passengers while the load factor increased to 77% from 75% in the same period last year.

Fernandes said its cost per average seat per km (ASK) of 3.62 US cents was mainly due to higher average fuel cost. He said the average fuel price in the second quarter was US$100 per barrel against US$60 a barrel in the same period last year.

However, its revenue ASK grew by 26% to 4.88 US cents in the second quarter from 3.87 US cents perviously. “I think we remained prudent with hedging, but it’s very useful too – that we’re not trying to bet where the market’s going, we’re just trying to match our forward sales with our oil hedging,” he said when asked on its hedging status.

Fernandes said its net gearing was expected to improved after the deferment of aircraft in 2011. “We have deferred seven A320s for 2011 to 2015. We are planning to reduce aircraft deliveries to 10-12 from 2012 onwards,” he said. He expected AirAsia’s gearing ratio to be below two times from 2011 onwards.

On aircraft financing, he said the financing for all the aircraft in 2010 was secured. As of June 30, the group has a total of 85 planes. Of the total, 50 planes are for Malaysian operations, while Thailand has 20 and Indonesia 15.

Fernandes was confident that the group’s cash balance would surpassed RM1bil by year-end. It has a current cash balance of RM858mil.

“We’ll easily surpass that by year-end. We will be getting re-payment from our associates in Thailand and Indonesia.” He added that with the listing of associates, the amount due from associates could potentially be converted to new shares to maintain shareholding in Thai AirAsia and Indonesia AirAsia.

“It is very premature for me to comment. We believe we have a very strong brand in Thailand. We are not duly concerned. We are not focusing on our competitor, but ourselves,” Fernandes said when commenting on Tiger Airways’ venture into Thailand.

Analysts contacted said AirAsia’s strong performance was above their expectation.

“They (AirAsia) did superbly despite the significant rise in the fuel bill due to the higher oil prices. And that’s largely thanks to the strong growth in ancillary income which sort of ‘offset’ the higher fuel expenses. The deferment of aircraft significantly reduces the debt burden, and should contribute positively to earnings via lower financing costs and better yields through higher loads,” an analyst said.

Another analyst said AirAsia’s operational numbers look very good and were slightly above his expectations.

KDNK lebih 6% tahun ini

Pertumbuhan ekonomi negara bagi tahun ini dijangka mampu menjangkau lebih enam peratus, mengatasi unjuran asal 4.5 peratus hingga lima peratus.

Gabenor Bank Negara, Tan Sri Zeti Akhtar Aziz berkata, prestasi itu akan dipacu oleh permintaan domestik yang kukuh serta perbelanjaan sektor awam dan swasta yang tinggi.

Beliau berkata, unjuran bagi prestasi keseluruhan 2010 negara itu juga telah mengambil kira kelembapan ekonomi di negara-negara maju yang dijangka berlaku pada separuh kedua nanti.

‘‘Malaysia telah mencatatkan pertumbuhan teguh pada separuh pertama 2010 dan akan terus kekal kukuh pada separuh kedua.

‘‘Dengan prestasi semasa, Malaysia akan mencatatkan pertumbuhan ekonomi melebihi enam peratus pada 2010,” katanya pada sidang akhbar selepas membentangkan prestasi kewangan bagi suku kedua 2010 di sini hari ini.

Malaysia telah mencatatkan pertumbuhan ekonomi pada suku kedua sebanyak 8.9 peratus, didorong oleh peningkatan berterusan dalam permintaan dalam dan luar negeri.

Pada suku pertama lalu, negara mencatatkan pertumbuhan ekonomi sebanyak 10.1 peratus.

Keluaran Dalam Negara Kasar bagi separuh pertama tahun ini ialah 9.5 peratus

Menjawab pertanyaan, Zeti berkata, walaupun ekonomi negara-negara maju dijangka mengalami kelembapan pada separuh kedua 2010, namun Malaysia mampu mengekalkan prestasi kewangan sedia ada.

Menurut beliau, keyakinan itu berasaskan negara memiliki sistem kewangan dan fundamental yang mantap, kadar inflasi dan pengangguran rendah serta akses pinjaman yang mudah.

Beliau berkata, biarpun perdagangan dengan negara-negara maju terjejas tetapi perdagangan antara negara-negara Asia terus menyaksikan pengembangan kukuh.

‘‘Kita akui aktiviti perdagangan dengan negara-negara tradisional menyusut tetapi pada masa sama aktiviti dagangan dengan pasaran baru terus rancak,” jelas beliau.

Pada sidang akhbar itu, Zeti berkata, permintaan dalam negeri bertambah sebanyak sembilan peratus disebabkan penggunaan swasta yang lebih tinggi dan perbelanjaan sektor perniagaan dan awam lebih baik.

Penggunaan swasta meningkat sebanyak 7.9 peratus disumbang oleh faktor pasaran kerja yang menggalakkan, inflasi relatif yang rendah dan paras pendapatan terus meningkat.

Dari segi penawaran, sektor ekonomi utama terus merekodkan pertumbuhan kukuh dipacu oleh sektor perkilangan dan perkhidmatan.

Sektor perkilangan berkembang pada kadar mapan sebanyak 15.9 peratus dengan pertumbuhan menyeluruh merentas semua kelompok.

Sektor perkhidmatan juga meningkat dengan kukuh sebanyak 7.3 peratus, disokong prestasi kukuh subsektor perdagangan borong dan runcit, kewangan dan insurans dan pengangkutan dan penyimpanan.

Kadar inflasi keseluruhannya meningkat 1.6 peratus disebabkan kenaikan harga makanan dan minuman tanpa alkohol.

Dalam sektor luaran, lebihan perdagangan mengecil kepada RM23.4 bilion pada suku kedua memandangkan import kasar meningkat lebih cepat berbanding eksport kasar.

Eksport kasar berkembang sebanyak 21.7 peratus hasil permintaan kukuh bagi keluaran elektrik dan elektronik (E&E) dan permintaan eksport berterusan terhadap keluaran bukan E&E dan mineral.

Pada asas tunai, aliran masuk pelaburan langsung asing (FDI) kasar berjumlah RM4.7 bilion pada suku kedua.

Pelaburan langsung luar negeri bersih oleh syarikat Malaysia berjumlah RM2.5 bilion pada suku kedua terutama untuk pelaburan dalam sektor perkhidmatan serta minyak dan gas.