KUALA LUMPUR, Aug 31 — Moody’s Investors Service Inc has reaffirmed Axiata Group Bhd’s Baa2 rating on its sukuk notes on the back of senior unsecured debt issued by Axiata SPV1 (Labuan) Ltd and MTN programme established by Axiata SPV2 Bhd, with stable outlook.
The rating agency said the ratings affirmation was backed by Axiata’s 62.4 per cent-owned subsidiary, edotco Group Sdn Bhd’s recent partnership announcement with Pakistan-conglomerate, Dawood Hercules Corporation Ltd, as well as, the Group’s (Axiata) stable earnings outlook, among others.
“Axiata will maintain its solid operating and financial profile, given the relatively stable cash flow from Celcom and higher dividend contribution from its international subsidiaries over the medium-term,” said Moody’s in a statement today.
Moody’s expected Axiata to remain prudent in balancing its shareholder initiatives and debt-holder protection measures and, remain committed to maintaining reported leverage at or below 2.3 times.
Axiata’s revenue for 2016-2017 would likely grow by mid-single-digit percentages, supported by the steady performance of XL Axiata Tbk (PT) (Ba1 positive) in Indonesia, as well as, continued solid growth at Robi Axiata Limited in Bangladesh and Dialog Axiata PLC in Sri Lanka.
“This will help offset the weaker operating performance of Celcom, stemming from intense competition in Malaysia,” it said.
Moody’s said Axiata’s cash flow was expected to stay strained in the next one to two years, reflecting the company’s progressive dividend payout policy and elevated capital expenditure, which was likely to be higher this year as the company upgraded its network.
However, stable earnings from diversified revenue sources, solid market positions and strong relationship with the government, which was rated A3 stable, would continue to support Axiata’s rating, it added. — Bernama
Source: The Malay Mail Online