* Q2 profit 663.1 mln rgt vs 576.8 mln rgt last yr
* Sees tough market conditions ahead
KUALA LUMPUR, Aug 23 (Reuters) - Malaysia’s mobile phone operator Axiata Group posted a 15 percent rise in second-quarter profit, driven by increased demand for data services and improved contributions from regional operations.
Income from data services such as wireless broadband, Internet access and other non-voice facilities is driving growth for Malaysia’s telecom operators as the country’s broadband usage remains low at 55 percent of the population.
“The demand for data is growing and the challenges of voice and SMS data substitution is accelerating especially in our more mature markets,” Chief Executive Jamaludin Ibrahim said.
Jamaludin also said tough market conditions look set to continue.
“Difficult operating conditions such as softening markets and the strengthening of the ringgit against most other currencies have continued in the second quarter of the year,” said Jamaludin, who has held the post since 2008 when Axiata was carved out of state-owned Telekom Malaysia Bhd .
Axiata posted net profit of 663.1 million ringgit in April-June, compared with 576.8 million ringgit a year ago.
However, it fell short of 743.4 million ringgit average forecast provided by two analysts, according to Thomson Reuters I/B/E/S.
Axiata, Malaysia’s largest mobile phone service provider by market capitalisation, is the country’s only telecoms company that operates in South and Southeast Asia.
It has over 150 million mobile subscribers in Asia.
The company saw improved performances from almost all its operating units, mainly from Celcom Axiata in Malaysia, XL Axiata in Indonesia, Dialog in Sri Lanka, and Robi in Bangladesh.
The company’s performance continued to be anchored by its flagship unit Celcom, whose revenue grew 3.4 percent, and XL Axiata, which saw a revenue growth of 7.0 percent, on increased subscriber base.
Axiata recently bought a 0.9 percent more stake in India’s fourth-biggest mobile carrier Idea Cellular , raising its holding to about 20 percent.
Twenty-three out of 27 analysts tracked by Thomson Reuters I/B/E/S have either a “buy” or a “strong buy” call on the stock, at an average target price of 5.70 ringgit.
Three analysts rated the stock “hold,” while one gave it an “underperform” rating.
Axiata shares were up 0.2 percent at 4.99 ringgit at the close of the morning session, while the benchmark index was flat at 1473.28 points.
The company’s shares have risen 4.6 percent since the start of the year through Monday, outperforming the broader market’s 3.4 percent fall and rival Maxis’ 1.1 percent gain. (Reporting by Purwa Naveen Raman and Fong Min Hun; Editing by Vinu Pilakkott)