RHB Research expects softer Axiata results

AXIATA Group Bhd's fourth quarter results ended December 2013 (4Q13), which will be announced today, are likely to be softer year-on-year, RHB Research said.

This is due to the expected weak performance of its Indonesian unit Axiata XL.

"Overall, we expect Axiata's 4Q13 earnings to dip by low single digit year-on-year. Quarter-on-quarter, we expect the company's 4Q13 earnings to decline by the double-digit range following XL's RM113 million lumpy forex hedging gain booked in 3Q13," RHB Research said yesterday.

The firm does not expect any positive earnings surprises to consensus estimates, given that its Sri Lankan unit Dialog Axiata's FY13 earnings comprised only 85 per cent of its full-year forecast.

The appreciation of the ringgit against the rupiah may also squeeze group earnings, it added.

"Dialog's unexciting 4Q13 results and the ringgit's continued appreciation versus the rupiah suggest that positive earnings surprises are unlikely."

However, RHB Research believes these negatives are largely priced in.

The firm said that any special dividends are unlikely for now, while maintaining its "neutral" call on Axiata.

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