Forex gains help lift TM fourth quarter earnings

Business Times : 23 February 2010(Jeva Arulampalam)

Telekom Malaysia expects its business to continue being driven by two key products, Internet and data, this year

Telekom Malaysia Bhd (TM) (4863) said its fourth quarter net profit inched up 3.3 per cent to RM170.25 million due mainly to foreign exchange (forex) gains.The group expects its business to continue being driven by two key products, Internet and data, this year while it works on stopping the decline in its voice services, group chief executive officer Datuk Zamzamzairani Mohd Isa said."These efforts to arrest voice decline include bundling Internet and voice services together and enhancing the fixed-to-mobile calls service - basically to encourage the use of fixed lines to make calls to mobile lines," he told reporters at the group's results briefing in Kuala Lumpur yesterday.Among its key performance indicators for this year are a revenue growth of 2 per cent and an ebitda (earnings before interest, tax, depreciation and amortisation) margin of 33 per cent.

TM has also allocated a business as usual capital expenditure not exceeding RM1.4 billion.The group's revenue in the quarter ended December 31 2009 fell 9 per cent to RM2.27 billion from a year ago due to lower revenue from its emergency call centre project, called MERS 999.Internet and multimedia revenue, however, rose 2.6 per cent to RM402 million, driven by an increase in the number of broadband customers.In the full year ended December 31 2009, TM's net profit rose 180.4 per cent to RM643 million (excluding the results of the demerged Axiata Group) due to lower operating costs, gain on disposal of equity investment and forex gains over its US dollar debts.Its revenue fell 0.8 per cent to RM8.61 billion due to the drop in voice revenue and revenue from MERS 999.

The group's voice revenue accounts for 46 per cent of overall group revenue compared with 51 per cent in 2008."Excluding revenue from MERS 999, the current year revenue would have increased by 0.9 per cent," group chief financial officer Datuk Bazlan Osman said.Its ebitda was up 6.4 per cent to RM3.1 billion.The company is proposing a final dividend of 13 sen totalling RM348.9 million on top of the interim dividend of 10 sen distributed in September last year."With the proposed dividend payout of RM706.5 million, this brings our 12-month total return to shareholders to 38.5 per cent," Zamzamzairani said.On the high-speed broadband project, he said the group was on track to commercially launch the retail service in Shah Alam, Subang Jaya, Taman Tun Dr Ismail and Bangsar by the end of next month."We will also provide service coverage in some areas within Putrajaya, Cyberjaya and Iskandar Malaysia, with the goal to have complete coverage by the third quarter of this year," he added.TM is targeting to complete fibre installation on 750,000 premises this year, including the 150,000 achieved last year.

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