2Q2022 Key Highlights (vs 2Q2021)
- Increased demand for Internet and Data translated to an 11.8% growth in Operating Revenue, at RM3.09 billion compared to RM2.76 billion
- Manpower and other OPEX cost optimisation contributed 81.3% EBIT growth, recorded at RM702.7 million
- PATAMI up 73.0% at RM378.0 million from RM218.5 million, as a result of higher operating profit and lower net finance cost
- Invested 15.7% of revenue in CAPEX or RM484.5 million in fibre expansion, network upgrades and support systems
- Free Cash Flow increased 36.4% at RM730.5 million, mainly attributed to increase in revenue and cost optimisation initiatives
- Interim Dividend of 9.0 sen per share declared with Dividend Reinvestment Scheme applicable (DRS)
- On track to achieve its 2022 market guidance, TM continues to strengthen core businesses while investing in new growth areas
Telekom Malaysia Berhad (TM) has sustained its growth trajectory, delivering an excellent set of financial results across all key metrics for the second quarter ended 30 June 2022, offering converged services and solutions and demonstrating its resilience against increasing competition from other telco and technology players.
The Group’s operating revenue grew by 11.8% to RM3.09 billion, compared to RM2.76 billion in the same quarter last year (YoY), on a foundation of strong performance across every customer segment and a sharp increase in revenue from all lines of service, particularly Internet and Data.
Optimisation efforts enabled TM to record lower manpower and other OPEX costs, which led to higher Earnings Before Interest and Taxation (EBIT), up 81.3% at RM702.7 million compared to RM387.6 million YoY.
Profit After Tax and Non-controlling Interest (PATAMI) was up 73.0% at RM378.0 million from RM218.5 million YoY, on the back of accelerated demand for connectivity, services and digital solutions. The Group applied the 33% Cukai Makmur statutory tax rate accordingly for the current quarter.
In addition to Group-wide cost optimisation initiatives, the revenue jump helped drive an increase of Free Cash Flow by 36.4% to RM730.5 million YoY, putting TM in a solid position to make future investments and further reduce debt.
TM also declared an Interim Dividend of 9.0 sen per share in line with its policy to distribute yearly dividends of 40% - 60% from its PATAMI. The DRS is applicable for this dividend tranche to provide flexibility to shareholders, enabling participation into the Group’s continuous growth momentum.
unifi: Maintaining growth momentum
As the leading convergence provider in Malaysia, unifi recorded a 10.3% revenue increase from RM1,272.0 million to RM1,402.6 million in the current quarter, driven primarily by continuous growth of fixed broadband subscribers, which recorded a 14.1% increase from the same quarter last year.
unifi continues to innovate the home entertainment landscape, rapidly adapting to consumer consumption patterns through more attractive content that can be viewed both at home via high-speed broadband as well as on mobile devices via the playTV@unifi app. Its growing content ranges from Hollywood to Hallyu, offering variety for everyone.
unifi's focus also extended to local SME businesses with the month-long #BelanjaDiSME campaign, as well as the SME Digitalisation Grant (SDG), which provides entrepreneurs with up to 50% savings for internet subscriptions and digital solutions.
TM Wholesale (TMW): Leading the charge in positioning Malaysia as a digital hub
TMW continues its march to be the nation’s preferred network infrastructure provider and to position Malaysia as a digital hub. Revenue for the current quarter increased by 26.4% from RM585.3 million YoY to RM739.9 million, contributed mainly by higher revenue from data and voice services.
TMW’s compelling performance is underpinned by escalating domestic data demand and new deals secured on the international front. It recorded the highest installation for High-Speed Broadband (HSBB) Access in June 2022, driven by mobile network operators (MNOs) and content service provider under JENDELA. TMW also delivered more than 4,500 cumulative 4G and 5G backhaul sites in supporting the MyDIGITAL blueprint for enhanced digital inclusivity nationwide.
On the international front, TMW has secured new deals with a US-based hyperscaler and a North Asian digital provider. Simultaneously, its collaborative agreement with Globe Telecom will enable its customers to enjoy superior gaming experiences, a strategic move to expand its business beyond its telco offerings.
TM One: Stronger performance amidst market challenges
The Group’s enterprise and public sector arm, TM One, recorded an increase in revenue of 4.1% YoY to RM854.6 million, with growth from recurring business across the enterprise and government sectors. Global supply chain challenges and delays, however, continued to impact its operations and subsequent delivery of several customer projects.
As the sole local provider for the Government’s MyGovCloud initiative, TM through TM One, is the only hyperscale cloud provider to offer data residency, data locality and data sovereignty for the Malaysian Government and its citizens. This eliminates potential risks from international regulations, policy interventions, or risk of Malaysian data housed beyond Malaysia’s borders.
Credence: Spearheading TM’s growth into the digital tech space
Responding to the fast-growing market demand for the digitalisation of enterprises, Credence was recently launched to drive greater levels of digital capabilities and technology skills for the Group’s corporate customers.
Established as a start-up, Credence is TM’s new cloud and digital services company, focusing on becoming a trusted technology partner to accelerate the digital transformation of large enterprises and the public sector. Leveraging TM’s existing technology partners and new ventures, Credence will also accelerate the Group’s transformation in the digital tech space.
Commentary and Outlook from Imri Mokhtar, TM Group Chief Executive Officer
“At the mid-point of 2022, our financial performance and results demonstrate TM’s ability to manage our businesses effectively despite the headwinds arising from a challenging and competitive business environment. These results are also a powerful testament of our transformation journey, and our commitment to deliver a sustainable and inclusive Digital Malaysia.
“unifi will continue its trajectory to provide converged solutions to both residential and SME customers. unifi Business, specifically, will double down on its efforts to provide new propositions to engage SME customers including promotional campaigns and financing options.
“TM One remains focused in enabling the digital transformation of the enterprise and public sectors. Complemented by its global partner ecosystem, TM One continues to make inroads on bespoke solutions engineered and supported by its in-house ICT capabilities.
“TM Wholesale is on course to provide a comprehensive suite of advanced wholesale communication services and solutions for both domestic and global fronts. TMW is poised to position Malaysia as a digital hub for the ASEAN region.
“As part of TM’s commitment to empower businesses on their digital transformational journey, the Group will also address the digital and tech skills gap through Credence. This new digital services subsidiary will deliver a differentiated advantage for enterprise digital solutions, providing greater and faster time-to-value with customised options for enterprises.
“Looking ahead, 5G will level the playing field and move the industry away from network-based to service-based competition. TM welcomes the Government’s call for the industry to take up equity stakes in DNB. 5G will open up and expand the opportunities and growth areas for all of TM’s business segments – consumers, SMEs, enterprises, wholesale as well as digital services. We look forward to rolling out 5G-enabled products and solutions and unlocking value to meet customers’ demands.
“As Malaysia’s convergence champion, we believe 5G will strengthen our convergence proposition, and our customers will be encouraged to transition to 5G in the near term.
“Ultimately, TM’s growth and differentiation, whether in 5G, fixed broadband or digitalisation, will hinge on creating and offering exceptional customer experience, as we continue on our evolution towards becoming a human-centred technology company.”
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TM joins SK Telecom to Pioneer Multi-Access Edge Computing in Malaysia
SEOUL, 6 September 2023 – Telekom Malaysia Berhad (TM) and SK Telecom today inked a Memorandum of Understanding (“MoU”) to jointly develop the Multi-Access Edge Computing (MEC) business arrangement in Malaysia. This will pave the way for the business to be pioneered and provisioned in Malaysia. The signing took place at SK Telecom’s headquarters in Seoul in the presence of YB Fahmi Fadzil, Minister of Communications and Digital, Malaysia who had just arrived in South Korea for a working visit. TM was represented by Khairul Liza Ibrahim, TM Global’s covering Executive Vice President, while signing on behalf of SK Telecom was its Vice President and Head of Enterprise CIC of SKT, Kyeong Deog Kim. “I am happy to have witnessed the MoU signing between TM and SK Telecom as there are many opportunities that can be gained from such close cooperation and collaboration. I believe this MoU is a step in the right direction,” said Fahmi. Khairul Liza said, “TM remains steadfast in solidifying its stature as Malaysia’s preferred network infrastructure provider, catalysing digital industry and 4G/5G ecosystem while simultaneously positioning the country to become a digital hub for ASEAN. Our next step is to provide the means to empower all our customers in Malaysia and the region with multi-access edge computing from all our data centres around the country. Through this collaboration with SK Telecom, TM is stepping up its game to accelerate innovation for the nation’s progress towards a Digital Malaysia.” “Through collaboration with TM, we have once again confirmed that striving to provide faster and more stable services to customers through multi-access edge computing is a common interest of global telcos,” said Kim Kyeong-deog. “As we have been working actively to create a 5G ecosystem through the development of technology standards and use cases, we will put our best efforts so that our collaboration with TM contributes to creating a better communication environment in Malaysia.”
Employees of TM at Menara TM One, Damansara and Kepayan, Kota Kinabalu tested positive for Covid-19
Telekom Malaysia Berhad (TM) confirms two (2) positive cases of Covid-19 amongst its employees. One of the affected employees is based at Menara TM One in Damansara, Kuala Lumpur and the other is at its Kepayan office in Kota Kinabalu, Sabah. Both employees are currently under quarantine and receiving treatment at Government quarantine and medical facilities. TM management and staff are together praying for their speedy recovery. TM has taken proactive measures to mitigate further spread of the virus and keep our customers, staff and communities safe. At Menara TM One, all occupants were immediately evacuated and the office building closed for seven (7) days to facilitate thorough disinfection and sanitisation in accordance to the guidelines set by the Ministry of Health (MoH). TM offices in Sabah, Kedah and other Red Zone areas had been closed much earlier as proactive precaution in correspondence to the increasing cases recently. Following these two new positive cases, detailed contact tracing is being carried out by the MoH, assisted by TM's COVID-19 Crisis Response Team (CRT), to identify and inform those whom had close contact with the affected employees. Identified close contacts are being contacted by MoH for further advice and action. In ensuring continued services to our customers, TM employees at the affected states and areas have reverted back to Work From Home (WFH) arrangement utilising digital channels and online productivity tools. Meanwhile, critical function employees (contact centre, field teams for service installation and restoration) shall continue working in compliance to Government and TM's added safety protocols and guidelines. TM would like to remind everyone at all times to keep safe social distance, hygiene and adhere to the Standard Operating Procedures (SOPs) as advised by the Government. TM has taken and will continue to take all necessary measures to ensure the health and safety of our customers, employees and community.
unifi business a boost for MSMEs as economic recovery gains momentum
unifi Business Solutions help MSMEs kick start their online businesses As the country's National Recovery Plan gathers pace, many Micro, Small and Medium Enterprises (MSMEs) are ready to take advantage of the re-opening of economic sectors. In this respect, unifi has recently come up with solutions to help these businesses, many of which have transitioned seamlessly into the digital space post-COVID19 pandemic. In view of this, unifi is taking proactive steps to ensure that MSMEs can achieve business sustainability with its innovative offerings. This was made possible by partnering with proven technology partners and Government agencies that understand the needs of Malaysian businesses. With unifi Business Solutions, MSMEs can grow their businesses online and significantly boost sales and productivity at minimal costs through reliable high-speed Internet that comes with an array of tried-and-tested business solutions, including productivity and marketing tools. With solutions that suit the needs of current businesses, unifi Business Solutions have now established itself as the go-to platform for Malaysian MSMEs. This is attributed to its exceptional service, which includes swift, dependable nationwide support and sound, thought-out advice by its team of experienced consultants. For businesses venturing into the digital marketplace, they have the option of signing up with Digital Marketing Solutions where they can enhance their online presence by setting up a website, getting a business listing and securing more businesses with Facebook and Instagram ads. With cari@unifi Premium Listing, businesses are able to reach a wider customer base through postings listing and articles on unifi's cari@unifi marketplace platform. Productivity can be increased by signing up with Microsoft 365, where businesses can have real-time solutions to connect and collaborate anytime, anywhere. Understanding that new businesses might be overwhelmed with the digital marketplace maze, unifi Business, together with partners and Government agencies, offer free digital upskilling classes to MSMEs. Localised webinars by consultants and partners are held regularly to ensure that no businesses are left behind in the journey towards business digitalisation. In addition, all unifi business broadband and mobile customers will enjoy the benefits as a member of the unifi Business Club (uBC) where they will get access to relevant and current content at the uBC portal (https://ubc.unifi.com.my). Here, they can find content such as webinars, talk shows, live chats, events, business tips and articles that can help them navigate the business world. uBC members will also enjoy specialised financial assistance, productivity boosters, digital marketing platforms, tools and community engagement programmes that are tailored to a variety of business needs. Mohamad Yusman Ammeran, Head of SME Segment, unifi said with more economic sectors opening up, many MSMEs have embraced digitalisation to sustain and thrive, after a challenging period owing to the COVID-19 restrictions. "MSMEs form the backbone of our economy and Telekom Malaysia Berhad (TM) and unifi are ever ready to help these enterprises get back on their feet, come back stronger and help accelerate the country's economic recovery," he said. Yusman added that under unifi's current campaign, MSMEs could enjoy up to 50% off savings or get an RM5,000 matching grant for each company, as part of the PEMULIH initiative announced by the Government in June 2021. To encourage sign-ups amongst MSMEs, unifi is also offering exciting prizes under its Sign Up & Drive Away contest. The prizes include nine (9) four-wheel drive (4WD) vehicles during the contest period which will end on 31 December 2021. Other prizes include laptops, smartphones and computer tablets. So far, five (5) 4WD vehicles have been won, including by the latest winners, Zainun Ngah Enterprise and GAP Empire Trading, both of which are in the retail sector. Speaking at the prize giving event to the latest winners recently, Yusman said: "This is an excellent opportunity for local MSMEs to increase their productivity while reducing their operating cost, and at the same time, stand to win exciting prizes. We believe these offerings will help our customers bounce back stronger and help grow the Malaysian economy. We hope they see unifi Business not just as a service provider, but as an integral partner of their business journey." "unifi's online business solutions for MSMEs is in line with TM's support towards the Government's initiatives, such as JENDELA and MyDIGITAL, and fits into the Company's role as the enabler of Digital Malaysia," he added. For more information on unifi Business Solutions and MSME Digitalisation grant offerings, please visit www.unifi.com.my/business/smegrant.