25 May 2023
TM Records a Promising 1Q2023 Performance with 2.0% Revenue Growth; Continues to Strengthen its Core Business
1Q2023 Key Highlights (vs 1Q2022)
· Operating Revenue grew 2.0% from RM2.89 billion to RM2.95 billion, with continuous growth across Unifi and TM Global
· EBIT decreased 15.5% from RM560.4 million to RM473.3 million, following accelerated depreciation and impairment
· PATAMI lower 2.9% from RM339.9 million to RM330.1 million, lower EBIT cushioned by lower net finance cost and effective tax rate
· CAPEX investment stood at 14.0% of revenue or RM413.1 million, heavily attributed to fibre network expansion
Amidst the challenges for the year, Telekom Malaysia Berhad (TM) achieved a steady and promising performance in the first quarter that ended on 31 March 2023, compared to the same period in the previous year (YoY).
Operating revenue grew 2.0% to RM2.95 billion, from RM2.89 billion in 2022, driven by Unifi and TM Global. TM saw an increase in customers with Unifi now serving close to 3.5 million home and MSME customers, TM One catering to 8,800 businesses, and TM Global serving more than 700 local and regional customers.
Its reported Earnings Before Interest and Tax (EBIT) is lower 15.5% to RM473.3 million, from RM560.4 million, following the Group’s decision to accelerate depreciation and impairment of IT assets, due to changes in market conditions.
Profit After Tax and Minority Interest (PATAMI) decreased 2.9% to RM330.1 million from RM339.9 million. Lower net finance cost and lower effective tax rate from the recognition of deferred tax assets mitigated the impact of the lower EBIT on the Group’s overall profitability.
Capital Expenditure (CAPEX) stood at 14.0% of overall revenue, or RM413.1 million. A significant portion of this investment was dedicated to fortifying its fibre infrastructure, delivering new customer acquisition, international subsea cables investment and 5G fibre network deployment to meet Government’s target of 80% coverage by year end.
Unifi sustaining growth trajectory
Unifi continues to deliver leadership in convergence service and solutions for both home and MSMEs customers. Unifi reported a 1Q2023 revenue growth of 4.3% from RM1.38 billion to RM1.44 billion contributed by both, growth in number of subscribers and average revenue per customer (ARPC).
Unifi fixed broadband subscription increased by 8.1% to 3.08 million propelled by aggressive sales, and promotions such as the 6-months complimentary speed upgrade offered to existing Unifi Home users and 7-days free viewing of all Unifi TV channels during Chinese New Year.
Unifi Mobile unveiled its latest offerings, the UNI5G prepaid and postpaid plans, which include complimentary 5G access for all current mobile subscribers. Additionally, Unifi introduced the Pakej Perpaduan Jalur Lebar Tetap (Home Internet) and Pakej Perpaduan Prabayar Mudah Alih (Prepaid Mobile) plans specifically designed for underserved communities, providing inclusive and ubiquitous connectivity for the community.
Unifi Business’ collaborative efforts with local government agencies have been instrumental in supporting MSMEs to digitally grow their businesses. As part of this initiative, Unifi Business launched a programme in Sabah that has resulted in a significant participation of local entrepreneurs.
TM One navigating challenging market and shifting demand
TM One recorded a 6.7% slowdown in revenue from RM773.7 million to RM721.9 million in the current quarter, largely due to the impact of price reduction and lower revenue from one-off customer projects.
The delivery of key projects across several industries shall set the pace for TM One in the coming quarters. TM One delivered a Private 5G solution to enable Smart Industry solutions and completed a hybrid cloud project that is instrumental to the IT backbone transformation of its customer. TM is also the only telco with a 100% completion record for the Point of Presence (POP) Phase 1 Project, successfully delivering 233 sites across the northern states, Sabah and Sarawak.
Building on the success of TM One 5G Sphere Partner Programme launched end of 2022 where more than 90 leading partners are registered today, TM One launched its Sandbox platform providing a secure and controlled environment for enterprise and Government customers with technology partners to co-create and commercialise innovative smart service solutions, which will propel their digitalisation and automation drive.
TM Global catalysing digital inclusivity
TM Global reported continuous growth in 1Q2023, with revenue increasing by 3.9% from RM625.1 million to RM649.2 million, contributed by higher data and data centre co-location services.
As the leading partner for High-Speed Broadband Access (HSBA), TM Global achieved the highest number of new installations in March, supporting collective industry growth throughout Malaysia. Additionally, close to 8,000 4G and 5G fiberisation site were deployed to meet the growing demands of industry players and enhance nationwide edge capabilities, further propelling national digital initiatives.
Internationally, TM Global secured deals from US-based hyperscaler and North Asia digital provider for its wholesale data centre solutions as well as a substantial deal from ASEAN telecommunication player for more than 10Tbps data requirement within this region. TM Global remains focused on positioning Malaysia as the preferred digital hub for the ASEAN region through its comprehensive and customised offerings for hyperscalers, global carriers and digital players.
Commentary and Outlook from Dato’ Imri Mokhtar, TM Group Chief Executive Officer
“2023 is expected to be a challenging year with changes in the regulatory landscape, heightened competition and other market structure changes. TM will continue strengthening its core business to be commercially sustainable as a Public Listed Company (PLC) whilst continuing to contribute to the nation’s growth via its role as a Government Linked Company (GLC).
“As the national connectivity and digital infrastructure provider, TM will continue to execute the fiberisation plan to support the Government’s National Digital Network (JENDELA) programmes as well as the 5G rollout nationwide. TM looks forward to continue playing an active role in the 5G implementation, leveraging its nationwide fibre infrastructure, extensive digital platforms (data centres, edge nodes) and rollout experience.
“We remain steadfast as we enter the final year of our 2021-2023 Transformation Programme, and pursue the next wave of growth beyond 2023. In line with our journey to become a human-centred TechCo, we announced the launch of TM’s new HQ and Campus, located in Cyberjaya. The campus will serve as a catalyst for a new way of working that drives agility and flexibility through digital collaboration and hybrid work environment, propelling innovation among our employees, customers and partners.
“We will continue to advocate sustainability efforts and strive for progress. TM has released our first Task Force on Climate-related Financial Disclosures (TCFD) report, 2 years ahead of Bursa Malaysia’s 2025 requirement. The report focuses on increasing transparency around the financial implications of an organisations’ climate-related risks and opportunities.
“Though cautious with the overall outlook, we remain optimistic with the prospects of increased hyperconnectivity, continuous growth investments in connectivity and digitalisation across all customer segments. TM will continue to enable a Digital Malaysia by offering comprehensive suite of communication services and digital solutions benefitting communities, businesses and Government.”
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TM collaborates with Malaysia telecommunications tower providers for access to tower sites facilities
The strategic collaboration affirms TM’s commitment and readiness to drive Malaysia’s Digital Economy aspirations as the national digital infrastructure accelerator Telekom Malaysia Berhad (TM) marked another milestone as the national connectivity and digital infrastructure provider when its wholesale domestic and international business arm, TM WHOLESALE, entered into a collaboration with nine (9) tower providers (TowerCos), enabling access to tower sites facilities. The nine (9) TowerCos are the members of Persatuan Penyedia Infrastruktur Telekomunikasi (PPIT), namely D'Harmoni Telco Infra Sdn Bhd, Melaka ICT Holdings Sdn Bhd, Perlis Comm Sdn Bhd, Infra Quest Sdn Bhd, Perak Integrated Network Services Sdn Bhd, EdgePoint Towers Sdn Bhd, PDC Telecommunication Services Sdn Bhd, Desabina Industries Sdn Bhd and Yiked Bina Sdn Bhd. The ceremony was held recently in Johor Bahru attended by TM and nine (9) other TowerCos. TM was represented by Amar Huzaimi Md Deris, Executive Vice President, TM WHOLESALE, while the TowerCos were represented by: Dato' Haji Mohd Rehat Ahmad, Chief Operating Officer, D'Harmoni Telco Infra Sdn Bhd, who is also the President of PPIT Dato' Mohd Fauzi Yaakub, Deputy Chairman, Melaka ICT Holdings Sdn Bhd Dato' Ramli Abd Rahman, Managing Director, Perlis Comm Sdn Bhd Ab Aziz Yunus, Executive Chairman, Infra Quest Sdn Bhd Iwan Che Wan Che Ismail, Chief Executive Officer / Managing Director, Perak Integrated Network Services Sdn Bhd Muniff Kamaruddin, Chief Executive Officer, EdgePoint Towers Sdn Bhd Hasmunir Hamid, Acting Chief Executive Officer, PDC Telecommunication Services Sdn Bhd Shikh Badrudden Shikh Ismail, General Manager, Desabina Industries Sdn Bhd Azhan Abdul Hamid, General Manager, Yiked Bina Sdn Bhd Under the collaboration, the nine (9) TowerCos will provide TM with access to their tower sites, including land and rooftop facilities. This will enable TM to connect the towers with its high-speed fibre optic network to support high quality network performance and capability. Commenting on the collaboration, Amar Huzaimi said, "TM through TM WHOLESALE, is committed to ensuring our national telecommunication industry is provided with cutting edge connectivity and extensive fibre infrastructure solutions as a catalyst to accelerate the delivery of a high quality digital experience to all Malaysians, true to our role as national digital infrastructure accelerator. This will allow service providers to serve their customers with faster connectivity speed and greater bandwidth capacity for the current 4G and future 5G services nationwide. This partnership further demonstrates our commitment as the enabler of Digital Malaysia in supporting the country's digital aspirations, which include the Jalinan Digital Negara (JENDELA) and the Malaysia Digital Economy Blueprint (MyDIGITAL)." Meanwhile, Dato' Hj Mohd Rehat said, "TM has been a long-standing partner of PPIT for over a decade, and together, we have developed a high level of trust among each other. After a few series of fruitful discussions, PPIT and TM have once again agreed to ink a new collaboration to continue to work hand-in-hand in respect of the access to tower sites facilities."
TM R&D collaborates with Maldives’ leading digital services provider, Dhiraagu to bring ewar to businesses in Maldives
EWAR, A.I. driven contactless temperature screening solution made in Malaysia has now entered the international market Telekom Malaysia Berhad (TM), through its innovation arm, TM Research & Development (TM R&D), is expanding the delivery of its Artificial Intelligence (A.I.) driven contactless temperature screening solution – Early Warning, Alert & Response or "EWAR" – to Maldives. For the expansion, TM R&D is working alongside Dhiraagu, the leading and largest provider of telecommunications and digital services in Maldives, to assist local businesses in resuming full operations while maintaining a safe environment by installing EWAR at their premises. This initiative is set to provide businesses in Maldives and their stakeholders with the confidence for business continuity through the provisioning of the complete solution. Commenting on the collaboration, Dr. Sharlene Thiagarajah, Chief Executive Officer, TM R&D said, "We are excited to collaborate with Dhiraagu to introduce EWAR, a reliable and accurate contactless thermal screening solution to businesses in Maldives. As we are facing an unprecedented period, health procedures to curb the Covid-19 pandemic are universal which is why we believe EWAR serves two main purposes – to provide early warning alerts of high temperature efficiently and to minimise human contacts. We believe other countries can also reap the benefits of EWAR to better face this pandemic. We see this as our first step into showcasing how innovative digital solutions developed by Malaysian talents such as EWAR can assist in the fight against COVID-19 at the global front." "As we are navigating through a new normal, we will continue to introduce smart digital solutions that focus on safety and to help fulfil the digital requirements of businesses. This is befitting of our aim to serve a more digital lifestyle and in line with our support for TM's unique role of enabling a more Digital Malaysia," she added. Harnessing their expertise in digital platforms and digital solutions, TM R&D introduced two (2) main products under EWAR, namely EWAR Crowds and EWAR Compact in April. EWAR Crowds is designed to conduct a rapid body temperature screening of approximately 10-15 individuals per second simultaneously at high traffic areas. The solution is non-intrusive and can easily be deployed in locations with mass traffic flow such as offices, shopping complexes, transportation hubs, universities, schools, tourist attractions, airports, immigration centres, and hospitals. EWAR Compact on the other hand is more suitable for one-on-one contactless thermal screening. This helps to eliminate the need for hand-held temperature taking devices which can subsequently minimise long queues and increase efficiency. Both EWAR products also come with cloud-based software and real-time monitoring app which makes this innovative solution unique. If any visitor entering the premises records a higher temperature, an alert will be triggered and a notification will be sent to the mobile device of the designated person in charge. The system also allows storing of individual temperature reports over a cloud system where it can be accessed remotely for tracking or analysis. "As we all are collectively working towards the same goal, health, and safety of our employees, customers, and communities are given the utmost priority. The EWAR solution has been developed with the highest accuracy for thermal screening. We are delighted to be collaborating with TM R&D to bring this complete solution to local businesses towards ensuring business continuity," said Mahmoud Dasser, Chief Marketing Officer of Dhiraagu. Currently, EWAR has been deployed at more than 150 sites across several industry verticals to provide accurate, hassle-free screening of employees and visitors. The sites include the quarantine and treatment centre for COVID-19 cases at Malaysia Agro Exposition Park (MAEPS) in Serdang, large and mid-size office lobbies, 12 schools, hotels, Kuala Lumpur City Hall (DBKL) payment counters, various sales galleries, Gamuda Land construction sites, just to name a few. TM R&D has been growing from strength to strength since 2016, winning seven (7) globally recognised awards over the last two (2) years. With more than 2,800 IPRs and 1,400 digital assets generated to-date, TM R&D's innovations, all developed in-house cut across multiple verticals such as Telco, Retail, Logistics, Agriculture, Healthcare and Education with safety and productivity as the top priority. As the organisation continues to expand beyond connectivity and into new value-added digital and smarter platforms, its role in TM has become more prominent and exciting. For more information about TM R&D and its products and services, please log on to www.tmrnd.com.my. Follow us on LinkedIn (TM Research & Development) for more news and updates.
TM One and SME Bank collaborate to deliver technology funding to SMEs under PENJANA
TM One and SME Bank sign agreement to provide technology funding to SMEs via SME Technology Transformation Fund (STTF) TM One, the business and public sector solutions arm of Telekom Malaysia Berhad (TM) today signed a Memorandum of Understanding (MoU) with Small Medium Enterprise Development Bank Malaysia Berhad (SME Bank), an agency under the Ministry of Entrepreneur Development and Cooperative to offer technology funding for its Small and Medium Enterprise (SME) customers to accelerate their business and digital transformation. The MoU was signed by Ahmad Taufek Omar, Executive Vice President and Chief Executive Officer, TM One while SME Bank was represented by Aria Putera Ismail, its Group President/Chief Executive Officer. The SME Technology Transformation Fund (STTF), is a fund set up between SME Bank and the Ministry of Finance to offer financing assistance of up to RM3.0 million to local SMEs. This is part of the Government's Pelan Jana Semula Ekonomi Negara (PENJANA) economic stimulus package to provide financial assistance to SMEs in adopting digitalisation and/or automation in their business operations. Commenting on the collaboration, Ahmad Taufek said, "We are excited to work hand-in-hand with SME Bank to accelerate digital adoption amongst our customers particularly in the SME segment. This is in support of the Government's efforts under PENJANA to execute key initiatives to help SMEs during the COVID-19 pandemic. Our aim is to assist SMEs in addressing real business challenges and issues that they are currently facing with the digital solutions available. We have put in place dedicated teams and solutions to enable our customers to realise the full potential of their digital opportunities. Our Professional Services are a consultative approach in helping SMEs to understand how to plan their digital transformation based on their unique business requirements." Meanwhile, Aria said, "With a fund size of RM500 million, STTF is expected to directly assist SME entrepreneurs to achieve higher productivity, process efficiency, efficient cost management and greater market penetration. As at 11 November 2020, SME Bank has approved 18 applications worth RM36.55 million under the STTF fund. SME Bank's role in encouraging the SMEs to adopt digital technology was further enhanced with the introduction of ODELA, the first one-stop e-commerce platform backed by a Development Financial Institution (DFI), that enabled B2B entrepreneurs to make transactions and foster partnership across vast ecosystems. The Bank's wholesome approach in providing financing and entrepreneur development assistance further adds value and accelerate the development of digital economy thus boosting the nation's economic growth in this challenging time." STTF is to be used for financing the purchases of IT solutions and services, technology support services, computer hardware and software, equipment and/or machinery and other intangible assets to enhance productivity and efficiency. SMEs as defined by the National Entrepreneur and SME Development Council (NESDC) are eligible to apply for STTF. TM One's solutions are aimed at helping SMEs to achieve higher productivity, better cost management and improved efficiency for wider market penetration through the adoption of digitalisation and automation. As the digital enabler for enterprise and public sector customers with enterprise-grade connectivity and end-to-end cloud offerings, the Company is well positioned to enable the ecosystem for digital society, digital business and digital government. Leveraging on its complete digital solutions offerings across connectivity (Internet & Data), voice and collaboration tools, business outsourcing services, cloud services, cybersecurity and Internet of Things (IoT)-based smart services, TM One will fulfil the needs of businesses and the public sector in embracing digital convergence towards enabling Digital Malaysia. This is in line with TM Group's unique role as the nation's connectivity and digital infrastructure provider. It is also in support of Jalinan Digital Negara (JENDELA) Plan to drive Malaysia's Digital Economy through business digitalisation and new ways of working. For more information on TM One solutions and how to apply for STTF, visit www.smebank.com.my and www.tmone.com.my.
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