Axiata Group Bhd’s first-half FY26 core PATAMI fell 38% year-on-year (YoY) to RM243 million, coming in below expectations as higher taxation weighed on the bottom line despite revenue and EBITDA tracking broadly in line, according to Hong Leong Investment Bank Bhd (HLIB Research).
HLIB Research said 2Q26 core PATAMI dropped 56% quarter-on-quarter (QoQ) and 18% YoY to RM74 million. Revenue rose 2.5% QoQ to RM2.87 billion, while EBITDA was broadly flat at RM1.35 billion.
On a constant-currency basis, however, Axiata’s operational performance was stronger. HLIB Research noted that management estimated 2Q26 underlying PATAMI at RM275 million, bringing 1H26 underlying PATAMI to RM717 million, more than double the previous year.
Among its operating companies, Dialog delivered 9.2% constant-currency revenue growth and 22.4% EBITDA growth, while reported PAT surged 70.2% to RM125 million. Robi also recorded stronger constant-currency revenue and EBITDA, while Smart’s reported performance was affected by currency movements and higher operating costs.
Following the results, HLIB Research cut its FY26, FY27 and FY28 earnings forecasts by 23%, 6% and 5%, respectively, mainly to reflect higher tax assumptions.
The research house nevertheless maintained its ‘Buy’ rating, although it lowered its target price to RM2.55 from RM2.95 after widening the holding company discount to 20% from 5% to reflect a longer asset monetisation timeline. HLIB Research said potential monetisation of Axiata’s stake in edotco remains a key rerating catalyst.
At HLIB Research’s reference price of RM1.82, the revised target implies 40.1% capital upside and a total expected return of 46.1% including dividends. Axiata also declared a 5.5 sen first interim dividend, up 10% YoY and in line with its Axiata28 dividend growth commitment.
