03 Mar 2023
TM DELIVERS LANDMARK 2022 PERFORMANCE (FY2022) Revenue up 5.1% at RM12.12 billion; EBIT up 22.2% at RM2.09 billion; PATAMI up 27.7% at RM1.14 billion
FY2022 Key Highlights (vs FY2021)
· Operating Revenue grew 5.1% from RM11.53 billion to RM12.12 billion, with growth across all customer segments and product lines
· EBIT grew 22.2% from RM1.71 billion to RM2.09 billion, driven by strong revenue growth and improved cost efficiency
· PATAMI grew 27.7% from RM0.90 billion to RM1.14 billion, contributed by lower financing cost
· CAPEX investment at 20.0% of revenue or RM2.43 billion, highest in 5 years primarily on growth in fibre service and network expansion
· Final interim dividend at 7.5 sen per share declared amounting to RM286.6 million, with total dividend of 16.5 sen per share amounting to RM627.5 million for 2022
· ESG rating upgraded, FTSE Russell rated 3.6 from 3.1 in 2021; CDP rated ‘B’ from ‘C’ in 2021. Both above industry average
· FY2022 overall performance showed strong results with good trajectory and operational excellence across all lines of business
The financial year 2022 (FY2022) performance, ended 31 December 2022, represents Telekom Malaysia Berhad’s (TM) progress of its 3-year transformation programme (2021-2023). Moving into the final year of this transformation phase, TM remains committed to its focus in delivering value to its stakeholders.
Operating revenue grew by 5.1% to RM12.12 billion, from RM11.53 billion in 2021, fuelled by demand in connectivity, solutions and infrastructure. TM continued to strengthen its core businesses across Unifi, TM One and TM Global amidst intensified competition in the market.
Through revenue growth and improved cost efficiency, TM’s Earnings Before Interest and Tax (EBIT) grew by 22.2% to RM2.09 billion, from RM1.71 billion last year.
Profit After Tax and Minority Interest (PATAMI) rose to RM1.14 billion from RM0.90 billion, up 27.7% through higher operating profit and lower financing cost.
Capital Expenditure (CAPEX) stood at 20.0% of overall revenue, amounting to RM2.43 billion invested to deliver growth in fibre services, network modernisation and upgrades.
Unifi’s continuous growth momentum
Unifi continues its leadership in converged solutions of fixed broadband, mobile services, digital content and solutions for both consumers and MSMEs, recording a revenue growth of 7.5% from RM5.22 billion to RM5.61 billion contributed by increased number of home and MSME customers.
Unifi fixed broadband customers grew by 9.3% and exceeded the 3 million mark in 2022. To celebrate this milestone, customers were rewarded with free viewing of all 72 Unifi TV channels for one month, as well as pay-per-view movie discounts in appreciation for their trust and loyalty.
Unifi launched its 5G services in November 2022, offering Uni5G plans to Unifi Mobile postpaid and prepaid customers. 5G will reinforce TM’s converged leadership to provide the widest and fastest all-in-one solution for fixed broadband, mobile service and digital content.
Unifi Business’ digital solutions continue to boost and support MSME’s digitalisation needs from cloud storage, eCommerce hub, cybersecurity and digital marketing, serving critical needs from connectivity to digital solutions, accelerating their business growth.
TM One drives enterprise-grade innovative solutions
TM One reported a 0.5% growth in revenue from RM3.32 billion to RM3.34 billion in 2022, after several years of revenue decline amidst changing market dynamics and competitive landscape. This is attributed to higher recurring revenue and bespoke solutions deployment, as a trusted technology partner for large enterprises and the Government.
Utilisation of data centre space and power have also increased in 2022. The twin-core data centre of KVDC and IPDC have obtained Green Electricity Tariff (GET) from TNB as well as Green Building Index (GBI) and Leadership in Energy Environmental Design (LEED) certifications.
To strengthen its partner ecosystem, TM One launched ‘5G Sphere’ in October 2022 and today counts on over 70 leading technology and smart solution partners to accelerate the co-creation of 5G use-cases. On the other hand, Credence is advancing enterprise’s ‘cloud-first strategy’ as well as developing technologically-skilled professionals to accelerate cloud adoption in Malaysia.
TM Global positions Malaysia forward as a digital hub in the region
TM Global (rebranded from TM Wholesale) delivered a strong performance which made a significant contribution to the overall 2022 performance. TM Global’s revenue grew 7.8% from RM2.58 billion to RM2.78 billion, on the back of higher domestic data and international digital demand.
Domestically, TM Global is the preferred partner for High-Speed Broadband Access (HSBA) with the highest new installation in 4Q 2022. Advancing the country’s 5G rollout, almost 4,000 fiberisation sites were completed for the year.
Internationally, TM Global closed deals from US-based hyperscalers and Asia-Pacific carriers for its wholesale data centre solutions and international data services, elevating Malaysia as a trusted digital hub for the ASEAN region.
Commentary and Outlook from Dato’ Imri Mokhtar, TM Group Chief Executive Officer
“2022 was a milestone year for TM, tracking well in our transformation with growth across our business segments – Unifi, TM One and TM Global, and cost efficiency improvement. The stronger financial position places TM in a position to deliver better value and benefits for our stakeholders – customers, shareholders, partner ecosystem and community.
“TM is committed to continuously invest in shaping a Digital Malaysia through technology that empowers communities, businesses and Government – not just in our core business, but also in new, adjacent growth areas such as cloud, data centre, cybersecurity and platform-services.
“Sustainability will also be a domain we strive to make continuous progress. We have seen improvements in TM’s ESG ratings, for example the FTSE Russell ESG score rising from 3.1 to 3.6 in 2022 and also the CDP rating upgrade to ‘B’ from ‘C’ last year, both above the industry average. On governance, TM upholds transparency, disclosure and zero-tolerance to all forms of corruption, receiving the Gold Category in the recent Integrity, Governance and Anti-Corruption Award (AIGA) 2022.
“As part of TM’s next transformation to become a human-centred TechCo, we announced a reorganisation in December 2022 to streamline our core businesses and subsidiaries under a new entity named TM Technology Services Sdn Bhd (TM Tech). TM Tech is set to become the main operating entity of the Group with effect from 1 March 2023. This new corporate structure will be the catalyst for the next phase of TM’s transformation to reinforce its fixed-mobile convergence leadership, further improve operational efficiencies and deliver a more seamless customer experience.
“On the back of our current business momentum, there are new opportunities in the adjacent growth areas but also industry headwinds in terms of regulatory policy and higher technology costs. We are continuously assessing the impact of industry developments and will work closely with key stakeholders towards providing technology that is accessible to all in this digital era.”
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TM posts solid 3Q performance with growth across all segments, continuous growth In revenue and EBIT
3Q2022 Key Highlights (vs 3Q2021) Operating Revenue grew 12.7% to RM3.16 billion, from continuous growth across all customer segments EBIT grew 38.2% to RM604.8 million, from strong revenue growth and improved business cost efficiency PATAMI decreased 2.2% at RM 265.2 million, following higher tax charges including Cukai Makmur, and foreign exchange translation loss on borrowings CAPEX investment at 19.1% of revenue or RM603.7 million, focused primarily on fibre service growth and network expansion, includes enabling 5G network rollout On the back of a solid first nine months, TM is revising upwards its market guidance on revenue and profit growth Delivering another solid quarter in 2022, Telekom Malaysia Berhad (“TM” or “the Group”) continues to chart a steady growth trajectory with its third quarter ended 30 September 2022 as compared to the same period last year (YoY). The Group’s operating revenue increased by 12.7% to RM3.16 billion, from RM2.80 billion in 3Q2021, the highest revenue recorded in the last ten quarters. TM’s focus on strengthening its core business and operational efficiency proved solid and resilient, capturing continued growth against the backdrop of intensifying competition. Better business cost efficiency from prudent operational spending plus optimisation programmes contributed to a better Group’s Earnings Before Interest and Taxes (EBIT) reported at RM604.8 million, a 38.2% growth from RM437.5 million in 3Q last year. Profit After Tax and Non-controlling Interest (PATAMI) stood at RM265.2 million, decreased 2.2% from RM 271.3 million recorded last year, as a result of higher taxation pay out and foreign exchange translation loss on borrowings. Continuous investment for growth and improving the experience of customers has been a rallying point for TM. The Group invested CAPEX at 19.1% of revenue this quarter, amounting to RM603.7 million to meet customers’ demands through fibre expansion, network modernisation and technology upgrades. Unifi sustains growth momentum Unifi demonstrated a continuous growth trajectory and continues its leadership in fixed-mobile converged (FMC) solutions of fixed broadband, mobile services, digital content and solutions for both consumers and MSMEs, recording a revenue increase of 7.0% from RM1.31 billion to RM1.40 billion. Driven by aggressive sales, promotions and loyalty programmes for customers, Unifi grew its fixed broadband subscriber base close to 3 million. With 5G now made available, Unifi will leverage this equal playing field to strengthen its position as the preferred provider for FMC, providing the widest and fastest all-in-one solution to meet today’s digital lifestyle. Unifi has also expanded its digital content portfolio with more on-demand streaming apps, with Unifi TV on track to become the largest streaming platform in Malaysia by end of 2022, with more than 15 streaming apps onboard. Its most recent launches include MangoTV, one of China’s leading online video platforms and SIAR, a local channel featuring classic Malay movies. With approximately 400,000 MSME customers, Unifi Business’ digital solutions and programmes aim to accelerate their digital transformation and business growth. On top of connectivity, Unifi Business also unveiled new business solutions to support MSMEs digitisation through cloud adoption, eCommerce Hub, cybersecurity and digital marketing, and were created to be affordable for this segment. TM One turnaround continues TM One, the Group’s enterprise and government sector arm, recorded a 11.9% growth in revenue from RM796.9 million to RM891.9 million in 3Q2022, clocking in a solid performance in the quarter. Growth was from both enterprise and government sector segments driven by connectivity services and customer projects. TM One inked more collaborations with several organisations to enable their customers’ digitalisation and transformative plans. TM One’s 5G Sphere comprising a technology ecosystem of more than 35 partners was recently launched to deliver 5G-enabled solutions for industry leaders to accelerate growth and create a more sustainable business operation. Its Private 5G solutions leveraging on dedicated and reliable Private 5G network will also propel enterprise adoption of IoT and IR 4.0 technologies, machine learning and analytics that will spur the nation’s economic growth. TM Wholesale (TMW) supports the telco/technology growth in Malaysia & region TM Wholesale (TMW) recorded a stellar performance in 3Q2022, with revenue increasing by 26.0% from RM610.9 million to RM769.9 million, making it the biggest revenue growth contributor for the Group in the current quarter. This is mainly attributable to higher domestic data and international digital demands from hyperscalers and global carriers within the region. More than 5,400 cumulative 4G and 5G fibre backhaul sites were deployed to expand network coverage and accelerate digital implementation nationwide. TMW continues to support the industry’s demand for High-speed Broadband Access (HSBA), delivering a total of more than 670,000 ports for 5 local broadband providers. At the international front, TMW secured a North Asia digital provider and a US-based hyperscaler as its latest wholesale Data Centre customers in Iskandar Puteri Data Centre. TMW also became the preferred service provider for a US-based hyperscaler in providing a long-term International Data services, thus strengthening its position as Malaysia’s preferred network infrastructure provider and at the same time positioning our country as a digital hub within ASEAN. Commentary and Outlook from Imri Mokhtar, TM Group Chief Executive Officer “TM’s growth momentum is expected to continue for the rest of 2022 from our core business segments - Unifi, TM One and TM Wholesale. We shall continue to invest in our technology capabilities, new growth areas of FMC and digital solutions, and in building capacity and digital talents within TM; while staying focused on growing with our customers, as well as continuing our operations cost discipline.” “Competition in FMC and the digital space is intensifying. We are strengthening our mobile business with the right strategy and capabilities to take TM into an era of true convergence. Unifi introduced exciting bundled packages for consumers and MSMEs, while TM One brings together leading technology and smart solution partners to accelerate innovative use cases. TMW continues to deliver on its aspiration to position Malaysia as the digital hub for ASEAN via submarine cables and date centre offerings.” “2022 is indeed the year to build our commercial resiliency to face the anticipated headwinds in 2023 – easing of economic growth, high supply chain cost and more measured customer spending.” “As we evolve from a converged Telco into a human-centred TechCo, we continue to focus on executing our transformation programmes which has produced tangible results for our customers and stakeholders.”
TM Announces Upcoming Change In Chairmanship
Telekom Malaysia Berhad (TM), is pleased to announce the appointment of Dato’ Zainal Abidin Putih as its new chairman effective 1 August 2023. He will succeed Tan Sri Azlan Hashim, who completes his 2-year term on 31 July 2023. Dato' Zainal Abidin brings a wealth of experience and distinguished track record in the corporate sector. He is currently Chairman of Financial Reporting Foundation (FRF), Land and General Berhad, Touch 'n Go Sdn Bhd and Tokio Marine lnsurans (Malaysia) Bhd, as well as Board Member of Khazanah Nasional Berhad and several private limited companies. He has also previously served as Chairman of Pengurusan Danaharta Nasional Berhad, CIMB Bank Berhad, Malaysian Accounting Standards Board (MASB) and President of Malaysian Institute of Certified Public Accountants (MICPA). As Chairman, Dato' Zainal Abidin will be responsible for overseeing the overall governance and strategic direction of TM. He will work closely with the Board of Directors and management team to drive TM's next wave of growth and strengthen its market position. Tan Sri Azlan, who shall complete his term as Chairman on 31 July 2023, expressed his confidence in the appointment of Dato' Zainal Abidin and stated, "I am delighted to hand over the reins to Dato' Zainal Abidin. His extensive experience and deep understanding of the corporate sector make him the ideal candidate to lead TM into its next phase of growth. I have full confidence in his ability to guide the company towards greater achievements and new horizons." Dato' Zainal Abidin expressed his gratitude for the opportunity and said, "I am honored to assume the role of Chairman of TM. I am excited to build upon the strong foundation laid by Tan Sri Azlan and work together with the Board and management team to create new opportunities and achieve even greater heights. It is an exciting time to be joining TM, especially as we build on the company's recent successes." TM extends its appreciation to Tan Sri Azlan Hashim for his invaluable contributions, dedication, and leadership during his tenure as Chairman. His vision and strategic guidance have played a pivotal role in the company's recent growth and success.
TM Committed For Success Of TVET Madani
Following the official launch of ‘Portal TVET Madani’ and the exchange of Memorandum of Collaboration with the Government today, TM has reaffirmed its commitment to the success of TVET Madani through its tailored vocational education modules along with RM3.5 million contribution for training facilities and scholarship. TM is presently in the final stage of discussions with several TVET institutions to form partnerships that will help transform these institutions into industry-ready technical development centres, towards enhancing the employability of their graduates. This will be achieved through the introduction of industry-relevant modules on fibre networks and digital skillsets, the certification of trainers aligning to industry standards, as well as examinations for student certification. The company plans to develop highly qualified and experienced instructors among its partner institutions to provide expert guidance, especially for B40 students, throughout their vocational journey, and to offer mentorship and support to help them succeed. TM also plans to equip its partner institutions with access to requisite facilities, relevant modern equipment and technology that will provide students with hands-on learning experience that prepares them for real-world fibre network and digital work. TM shall invest RM2.5 million to upgrade the facilities and equipment to selected TVET institutions and a further RM1 million in scholarships for students from the B40 group. As a start, this will facilitate employment opportunities for close to 400 graduates per year to work within its business eco-system. “TM is pleased to announce its commitment to the Government’s TVET Madani initiative through a comprehensive programme that will address the entire value chain. With our strong focus on skills development and industry-relevant training, TM is determined to transform lives and bridge the gap between education and employment for a digitally skilled future workforce,” said Datuk Imri Mokhtar, Group Chief Executive Officer of TM. “Across TM’s eco-system, we have over 430 fibre contractor partners, 880 vendors and over 90 TM 5G Sphere technology partners that will provide graduates close to 400 skilled job openings in the near future. “Vocational education will continue to play a crucial role in nurturing a skilled workforce and driving Malaysia’s digital economic growth. By equipping young Malaysians with the practical knowledge and skills needed in our telco and technology sector, we aim to empower the next generation of skilled talents to pursue meaningful careers and contribute to the development of communities and the nation,” he concluded.
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