TM Q2 income falls 51%

Forex losses weigh on company amid slight drop in revenue

PETALING JAYA: Telekom Malaysia Bhd’s (TM) earnings fell 51.5% to RM101.93mil in the second quarter ended June 30 (Q2’18), mainly due to foreign-exchange losses on borrowings compared with net gains a year ago.

In a filing with Bursa Malaysia yesterday, TM said revenue slid slightly by 1.5% to RM2.93bil in the quarter compared to RM2.98bil in the corresponding period last year from the dwindling voice and data services which were affected by falling revenue in light of regulatory mandated access pricing. Similarly, its business solutions arm TM ONE’s earnings also fell 30.2% to RM156.5mil in Q2’18 from RM224.3mil a year ago due to lower revenue from voice and data services.

However, the telecommunications company noted that there has been growth in revenue from other telecommunications-related services, as well as Internet and multimedia services.

Both TM’s unifi and TM Global segments saw an increase in earnings for Q2’18 compared to last year.

TM said its unifi earnings jumped 100% to RM52mil in the quarter from RM26mil a year ago due to an increase in the number of buys of Premium channels, video-on demand and the rise in the customer base of unifi mobile.

“As of June 30, 2018, the customer base increased 21% to 1.19 million from 986,957 a year ago,” it added.

Likewise, its unifi revenue was up slightly 0.5% to RM1.33bil from RM1.32bil on the back of higher unifi for homes and SMEs.

In a statement, TM acting group chief executive officer Datuk Bazlan Osman said its unifi basic plan would be extended to everyone beginning September this year, adding that it would no longer be for households earning less than RM4,500 a month.

“Affordability and accessibility of quality high-speed broadband services is important to TM, and we are committed to leading the charge to unlock the potential of a digitally-savvy Malaysia.

“As such, we are happy to announce that we are extending the unifi basic plan to all,” he disclosed.

Furthermore, TM Global’s earnings also increased 22.5% to RM103.9mil in the second quarter compared to RM84.8mil in the corresponding period last year due to lower operating costs.

However, revenue fell 4% to RM533.2mil from RM555.3mil a year ago impacted by regulatory mandated access pricing.

On TM’s financial results, Bazlan said the challenging regulatory pressures and market environment had greatly impacted the overall revenue and earnings of the group in the first half of this year.

“The first six months of 2018 have been very challenging for us, from rapid developments in the market to increasing regulatory pressures. Given the current landscape, these events further add challenges to our financial performance,” he added.

The group did not declare any interim dividend for Q2’18 compared to 9.4 sen a year ago. In view of the challenging environment, TM had revised its 2018 headline key performance indicators, as well as its capex guidance in July this year. Moreover, it also launched the performance improvement programme (PIP 2018) as an initiative to overcome headwinds.

For the current financial year ending Dec 31, 2018, Bazlan anticipates the challenging environment to continue for both its retail and wholesale segments.

“We expect the regulatory and sector challenges to persist in the near to mid term and undertaking these PIP 2018 initiatives are necessary measures to ensure the sustainability of our business for the long term.

“We will continue our focus on strengthening the performance of our core business and operations,” he said.