TM first half profit rises on higher revenue

Tuesday August 24, 2010





CEO: Ability to leverage on inherent strengths boosts results



KUALA LUMPUR: National telecommunications services provider Telekom Malaysia Bhd’s (TM) net profit surged 25.1% to RM367.3mil for the six months ended June 31, 2010, compared with RM293.7mil in the previous corresponding period, on higher revenue for data and Internet and favourable foreign exchange gain.



“The commendable first-half results were due to our ability to leverage on inherent strengths and scale opportunities in this competitive environment,” group chief executive officer Datuk Seri Zamzamzairani Mohd Isa told a media briefing.



“While we are seeing intense competition in the mobile and broadband market, TM continues to see strong growth in its broadband services.”



TM’s higher interim net profit was also attributable to the group’s strong focus on efficiency improvements, slower decline in voice usage and lower depreciation.



With such positive results for the first half of the year, TM will be paying an interim gross dividend of 13 sen per share less 25% tax, or about RM348.8mil, to shareholders by end-September.



The group is on track to meet its full-year dividend commitment of at least RM700mil, or up to 90% of normalised profit after tax and minority interests, whichever is higher, for its financial year ending Dec 31.



Group revenue for the first half grew 1% year-on-year to RM4.28bil. This was led by increasing demand for the group’s data and Internet services, which respectively reported revenue increase of 11.5% to RM822.6mil and 8.6% to RM786.7mil.



On a quarterly basis, TM’s group revenue also showed an increase of 1% year-on-year to RM2.15bil for the three months to June.



Net profit for the quarter under review, however, was a decline of 53.2% to RM124.4mil due to lower unrealised foreign exchange gains.



According to an analyst, the lower quarterly net profit was not surprising as TM could have expensed higher costs for the group’s fast-growing high-speed broadband services, UniFi, but some portion of the revenue could only be realised in the following quarter.



On the take-up rate for UniFi, Zamzamzairani told reporters that the group had 4,800 customers signed on as at the end of June, with total orders (for UniFi) exceeding 12,000 as of last week.



“We hope to achieve between 40,000 and 50,000 Unifi customers by the end of 2010,” he explained.



UniFi service rollout had already reached more than 500,000 premises nationwide as of last week, and the group was on track to achieve 750,000 premises by the end of the year.



According to Zamzamzairani, prospects for the telecommunications sector would remain challenging for the second half of the year but, with the improving economic conditions in the region, the company remained confident of achieving encouraging results.



“Going forward, our focus will still be on cost management and efficiency improvement,” he said.



TM gained three sen yesterday to close at RM3.58 per share. Year-to-date, the counter had posted a gain of 17.4%.

http://biz.thestar.com.my/news/story.asp?file=/2010/8/24/business/6907690&sec=business