TM takes the cautious approach due to pandemic

PETALING JAYA: Telekom Malaysia Bhd’s (TM) net profit fell by nearly half in the first quarter ended March 31 (Q1), impacted by lower revenue for all lines of its products.

It remains cautious due to the ongoing Covid-19 pandemic.

Net profit fell 50.5% to Rm152.52mil from Rm308.28mil previously.

Revenue slipped 0.8% to Rm2.55bil from Rm2.77bil a year ago.

Earnings per share for the quarter was 4.05 sen from 8.2 sen previously.

“The reduction in revenue led to the group recording lower operating profits before finance cost of Rm321.6mil, a 36.4% (Rm184mil) decrease from Rm505.6mil a year ago,” it said in a statement.

It said its revenue for unifi fell 8.4% (Rm103.4mil) from Rm1.23bil a year ago to Rm1.12bil due to a reduction in voice services due to lower usage from a decrease in cumulative customer base.

“Reduction in revenue from Internet and multimedia services was from the downward price adjustment exercise given to our Streamyx customers starting September 2019 onwards, as a reward for their loyalty,” it said.

Hence, reduction in revenue and higher operating costs contributed to a lower earnings before interest and tax (EBIT) of Rm84.1mil from Rm203.1mil a year ago.

As for TM ONE, its revenue fell 4.6% (Rm46.3mil) from Rm1bil to Rm960mil in Q1, mainly contributed by voice and data services from a lower cumulative customer base compared to a year ago.

However, EBIT rose 7.5% (Rm19.9mil) to Rm283.8mil in Q1 from Rm263.9mil a year ago, mainly due to lower operating costs.

As for TM Wholesale, Q1 revenue fell 11.9% (Rm68.8mil) from Rm578.1mil a year ago to Rm509.3mil, mainly due to lower revenue from voice services due to lower international traffic exchange compared to a year ago.

Operating cost fell largely due to lower voice out-payment.

Hence, EBIT for Q1 slipped 14.1% to Rm99.9mil from Rm116.3mil a year ago.

When compared with Q4 of financial year 2019 (FY19), TM said overall revenue in Q1 of FY20 fell 15.7% (Rm477mil) to Rm2.55bil from Rm3.03bil with lower revenue from all lines of products except for Internet and multimedia services.

Its operating profit before finance cost, however, increased 188.7% (Rm210.2mil) to Rm321.6mil from the Rm111.4mil recorded in Q4 of FY19.

In Q4 of FY19, there was the recognition of a one-off fair value adjustment of Rm233.7mil on redeemable exchangeable medium-term notes issued by a non-controlling shareholder of a subsidiary.

“This subsequently led to a Rm203.6mil increase in group profit after tax and minority interest from a loss of Rm51.1mil in the preceding quarter to a profit of Rm152.5mil,” itsaid.