Axiata reported a profit of RM431 million (US$95 million) for the first half of 2025 and announced a 5.0 sen interim dividend.

The Malaysia-based telecommunications group said its profit after tax and minority interest more than doubled year-on-year, while operating free cash flow after leases rose to RM868.7 million (US$191 million), up over 90%.

Revenue dropped 0.9% year-on-year on a constant currency basis, but fell 10% when translated to Ringgit due to currency strength.

Axiata reduced its net debt/EBITDA ratio to 2.8x after lowering debt by RM5.1 billion (US$1.12 billion), partly from proceeds related to the XLSMART merger and the deconsolidation of XL.

🔗 Source: Axiata

🧠 Food for thought

1️⃣ Merger synergies driving substantial value creation across Axiata’s portfolio

Axiata’s strategic transformation through major mergers is generating significant financial returns ahead of schedule.

CelcomDigi has already delivered RM1.7 billion in net merger synergies to date, with the company on track to achieve steady-state cost savings of RM700-800 million by 20271. This represents substantial value creation from the Malaysian telecommunications consolidation.

Meanwhile, XLSMART’s merger with Smartfren unlocked USD400 million in equalization payments and generated RM505 million in disposal gains1. The combined entity expanded its mobile subscriber base by 40% in the second quarter of 2025, demonstrating how market consolidation can rapidly drive customer growth1.

This reflects a broader industry trend where telecommunications companies are achieving scale through strategic mergers to compete more effectively. The success of these integrations shows how well-executed consolidation can create both immediate financial gains and long-term operational advantages in highly competitive markets.

2️⃣ Currency volatility masks strong underlying operational performance

Axiata’s financial results demonstrate how multinational companies can show strong operational growth while reporting weaker headline numbers due to currency fluctuations.

The company’s revenue declined 10.0% on a reported basis, but only 0.9% on a constant currency basis as the Ringgit strengthened against all operating currencies1. Similarly, EBITDA improved by 2.3% on constant currency terms despite an 8.5% decline in reported figures1.

This currency impact is particularly pronounced given Axiata’s exposure to markets like Bangladesh and Indonesia, where the Bangladeshi Taka and Indonesian Rupiah weakened significantly against the Malaysian Ringgit1. The company’s frontier markets collectively maintained a net USD cash position of USD165 million, helping to hedge against currency volatility1.

For investors analyzing multinational telecommunications companies, this highlights the importance of examining constant currency metrics alongside reported figures to understand true operational performance, especially during periods of significant exchange rate movements.

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