Annual Report 2012, PDF - Axiata Group Berhad - Investor Relations

Chairman’sStatementHIGH GROWTH MARKETSWe are fortunate that Axiata has developed a footprintwith substantial presence in high growth markets such asBangladesh and Sri Lanka, where revenues increased27% and 24%, respectively. In Cambodia, we strengthenedour position with the successful strategic merger of HelloAxiata Company Limited and Latelz Co., Ltd. The merger,our second since the acquisition of Idea in India, sawAxiata emerge as one of the largest operators inCambodia in terms of subscribers and revenue.Data revenue in Indonesia increased 50% with thecontinued emergence of a larger middle class withhigher spending power. Recent research suggests thatby 2020, Asians will account for 52% of the world’smiddle class population.Excellent strategic execution by the OpCos saw strongrevenue growth across the board during the year. Overall,Group revenue increased by 7% 1 YoY to RM17.7 billion.Excluding changes in foreign exchange, revenue growthwould have been 12%. The strong growth in Grouprevenue resulted in a 6% increase in the Group’s PAT ofRM2.9 billion. In addition, Axiata issued two benchmarkbonds during the year which have won awards for theirinnovative structures and terms and represent importantmilestones in the evolution of Axiata’s reputation in theinternational debt capital markets.In 2012, Axiata’s share price increased by 28%, with totalshareholders’ return (TSR) at 33% 2 , outperforming theKuala Lumpur Composite Index at 14% 2 for the thirdconsecutive year.The results achieved in 2012 has once again proven ourability to adapt quickly and undertake a significantreorganisation of the business whilst at the same timedelivering stellar results. This has enabled us to increaseour net operating cashflows, closing out the year with arecord cash balance of RM7.9 billion. I am pleasedtherefore to recommend to shareholders an increase inour ordinary dividend payout to 23 sen per share upfrom 19 sen and a special dividend of 12 sen per sharefor the year ended 31 December 2012.As a result, I am confident that the Group is focused onthe right industry and the most opportune regions tocapitalise on these trends and opportunities. With soundfinancial management, growing cash flow and strongperformance by OpCos, I am certain that Axiata is wellpositionedfor success in this new digital world.THE DIGITAL UNIVERSE AND AXIATA’STRANSFORMATIONLooking ahead, the Group is mindful of the challengeswhich are ahead on many fronts; economic circumstances,competitive environment, regulatory changes andindustry evolution. Given our strong management andoperational capabilities, financial resilience and networkassets, we are confident that we will rise to the challengesand capitalise on them.With low fixed line penetration in most of our markets,Axiata is well positioned to provide high quality dataservices in particular to small and mid-screen connections.Despite a slow start, Asian smartphone penetration is setto rise substantially faster than growth rates in Europe.Our smartphone penetration rate in Malaysia is 23% and14% in Indonesia, and increasing this will be the keygrowth driver for data and digital services.By 2020, the digital universe, which includes mobileusers and their new data consumption patterns as wellas the digital businesses and high-powered devices thatwould support this demand, is poised to grow by 50times its current size.Note1Based on 2011 audited numbers. Based on restated numbers, revenue growth is 8.4%. Please refer to Notes to the Financial Statementsno. 47 for more details2Based on Bloomberg L.P. data, between 31 Dec 2011 and 31 Dec 201212