TM Q2 in­come falls 51%

Forex losses weigh on com­pany amid slight drop in rev­enue

The Star Malaysia - StarBiz - - News - By ZUNAIRA SAIEED zunaira@thes­

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.

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