24 Feb 2021
TM Delivers resilient FY2020 performance well positioned to accelerate MyDIGITAL aspirations
- Improved FY2020 business performance amidst challenging environment; cost optimisation initiatives continue to drive profitability growth
- Committed to enabling Digital Malaysia towards MyDIGITAL growth aspirations
- Embarks on new TM transformation anchored on Value Programs with higher execution tempo
Key Highlights FY2020 Financials:
❖ The Group posted a revenue of RM10.84 billion, 5.2% lower from RM11.43 billion in 2019.
❖ Group Reported Earnings Before Interest and Tax (EBIT) increased by 2.3% YoY to RM1.60 billion, from RM1.57 billion in FY2019.
❖ Strong Group Reported Profit After Tax and Non-Controlling Interests (PATAMI) growth of 60.6% YoY at RM1.02 billion compared to RM632.7 million.
❖ Total capital expenditure (capex) for FY2020 at 13.7% of revenue or RM1.49 billion.
FY2020 Business Operations: Good underlying momentum
❖ unifi: Continues convergence leadership with growth in broadband and mobile customers; highest convergence take-up of TM households at 60%.
❖ TM ONE: Taking transformation forward to enable the digital transformation journey of enterprise and public sector customers with comprehensive suite of connectivity, cloud, data centre and smart solutions.
❖ TM Wholesale: Strengthens domestic and international ecosystem with telcos, digital service providers and hyperscalers to position Malaysia as a digital hub in ASEAN.
❖ TM is committed to Environmental, Social and Corporate Governance (ESG) Sustainability, building on our strong track record.
Moving Forward:
❖ New TM transformation: Embarks on new trajectory anchored on key Value Programs with higher execution tempo
❖ 2021 Market Guidance: Revenue to be flat to low single digit growth, EBIT to be more than RM1.6 billion and CAPEX to be between 14% to 18% of revenue.
❖ TM is well positioned to play a significant role in MyDIGITAL - covering digital connectivity (fibre, 5G, international connectivity), digital infrastructure (cloud, data centre and cybersecurity) as well as digital skillsets and talents (via Multimedia University and TM Digital Academy). Appointed sole home-based Cloud Service Provider (CSP).
A Resilient Business Performance for FY2020
Telekom Malaysia Bhd (TM) today reported its Financial Results for the full year ended 31 December 2020. TM Group Revenue recorded RM10.84 billion as compared to RM11.43 billion in FY2019, lower by 5.2% in the face of market and pandemic challenges.
TM’s performance improvement programs continued to bear fruit, with EBIT and PATAMI growth recorded from the previous year. Group EBIT for FY2020 rose by 2.3% YoY to RM1.60 billion, from RM1.57 billion in FY2019, on the back of lower operating cost, from the Group’s ongoing momentum of its cost optimisation and productivity programmes. This subsequently led to a strong 60.6% YoY growth in Group PATAMI to RM1.02 billion from RM632.7 million last year.
In 2020, the Company invested 13.7% of revenue in capex amounting to RM1.49 billion as it continued to optimise and modernise its network as well as sweating its assets. Of the amount spent, 53% was for network access, 22% for core network, and the balance 25% for support systems. This has ensured that TM’s network was able to effectively manage the network traffic that has surged over the period of the Movement Control Order (MCO).
For shareholders, TM is committed to continually increase shareholder value and declared a Final Interim Dividend of 7.5 sen per share with a total payout amounting to RM283.0 million for the financial year of 2020.
TM is also committed to sustainable growth, with increased emphasis on ESG, building on its strong track record as one of the 75 Bursa companies on the FTSE4Good Bursa Malaysia Index, with the full rating of 4/4.
New TM Transformation – Setting A New Trajectory
Building on current momentum, TM has embarked on the next exciting phase of its journey with the ‘New TM’ Transformation Programme (2021-2023). Guided by the ‘New TM’ Compass of Purpose, Customers, Performance and People; TM will inculcate a new performance culture that is focused on outcome and impact. Over the next 12 months, TM looks to improve EBIT growth through three (3) areas of excellence: in connectivity, solutions and customer experience; with stronger revenue from our business units, better cost management and productivity from operations optimisation, and improved customer experience.
The ‘New TM’ transformation is anchored on 40+ Value Programs, driven by a dedicated Transformation Office; with a new cadence towards a higher execution tempo, which is already showing early traction. TM is also reshaping its workforce into a stronger execution engine, embracing a more agile work culture with future-ready skills.
For 2021, TM is sharing the following market guidance: Revenue growth to be flat or single digit growth, EBIT to be more than RM1.6 billion and CAPEX guidance to be between 14% to 18% of revenue.
These will set TM on a sustainable growth trajectory, to create shareholder value and continuously enable a more Digital Malaysia. TM reiterates its support for MyDIGITAL – Malaysia Digital Economy blueprint and other Government’s digital and stimulus plans, towards accelerating the socioeconomic recovery and growth at this most critical time. TM believes that such public and private collaboration will propel the country towards a full-fledged Digital Malaysia by 2030 – a more digital society, digital business and digital Government.
Imri Mokhtar, Managing Director & Group Chief Executive Officer commented:
"We are pleased to report a resilient overall business performance in 2020 as we navigated through the challenges of the pandemic and macroeconomic environment. These uncertainties have required us to change the way we work, becoming more efficient in execution and being more prudent in managing resources.
We are excited for the next phase of our journey with the ‘New TM’ Transformation Programme (2021-2023) - guided by our compass of Purpose, Customers, Performance and People. Our performance momentum has further strengthened our conviction in the transformation ahead. TM Group will be at the forefront in this new economy towards improving the quality of life of our customers and supporting nation-building programmes including MyDIGITAL and other stimulus plans. We remain confident to bring value for our customers and shareholders in 2021 and beyond.”
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TM transformation reinforces customer centricity
Telekom Malaysia Berhad (TM) today announced its results for the financial year ended 31 December 2018. In addition, it also introduced its Performance Improvement Programme 2019- 2021(PIP2019-2021). Key Strategic Developments / Key Focus 2019: TM continues on its strategic journey to transform into “New TM” – a customer centric organisation to enable Malaysia’s Digital Nation aspirations through Connectivity and Digital Infrastructure. TM is extending the 4 pillars of Performance Improvement Programme 2018 (PIP2018) (Revenue Preservation & Uplift, Sustained Profitability, Improved Cash Flow and Increased Productivity) through to the next phase. Over the next 3 years, TM will focus on three (3) strategic pillars - Converged Services, Simplification & Digitalisation, Lean & Lower Cost, with its integrated network infrastructure together with its digital platforms and Warga TM as the enablers. Financial and Operational Highlights FY2018 TM was impacted by persistent headwinds in the industry and operating landscape over 2018. The Group posted a revenue of RM11.82 billion, 2.2% lower from RM12.09 billion in 2017. Internet revenue growth during the year under review was offset by lower data, voice and other services. Group Reported Earnings Before Interest and Tax (EBIT) was at RM64.6 million. During the financial year, the Group has recognised a provision of RM982.5 million for the impairment of fixed and wireless network assets following the continued pressure from challenging business, industry and economic conditions, combined. Group’s Normalised EBIT was RM1.07 billion, within 2018 guidance. PIP2018 initiatives such as cost optimisation yielded improved operating performance despite the lower revenue. Group Reported Profit After Tax and Non-controlling Interests (PATAMI) was at RM153.2 million, whilst Group Normalised PATAMI was RM632.4 million. The total capital expenditure (CAPEX) investment for 2018 was RM2.14 billion, or 18.1% of revenue; which was lower than TM’s full year capex guidance of 19-20% of revenue. By asset type, access comprised 57.4% of total spending, followed by core network at 17.8% and the remaining 24.8% was for support systems. In 2018, investments were focused on expanding connectivity via deployment of broadband ports and mobile coverage, as well as on digital infrastructure for ICT, data centre, cloud and smart solutions. Sustained customer satisfaction with Customer Satisfaction Measure (TRI*M index) score of more than 73, continuing the record of above global telco average of 66. Broadband updates: Increased Convergence penetration 53% of TM Households 2.23 million broadband customer base comprising 1.30 million unifi and 936k Streamyx customers. Updates on 2018 broadband programmes: > 911,000 unifi customers upgraded to 10 times existing speed > 239,000 Streamyx customers upgraded to unifi > 181,000 Streamyx customers upgraded to 2 times existing speed where technology permits For those yet to be upgraded, TM will continue ongoing discussions with the Ministry and the Malaysian Communications and Multimedia Commission (MCMC) to explore specific funding options, various fit-for-purpose technologies as well as optimising existing industry mechanisms in order to deliver a better broadband experience nationwide. TM ONE: Focused on industry verticals of enterprise and public sector to enable customers’ digital aspiration Expansion of digital infrastructure with completion of twin core data centre TM GLOBAL Continued to fortify the industry backbone and connecting Malaysia to the world Declares interim cash dividend of 2.0 sen per share or RM75.1 million; with expected pay out date on 12 April 2019. 2019 Guidance: Revenue between low to medium single digit decline, EBIT to be higher than 2018 level and Customer Satisfaction Measure of 74. Imri Mokhtar, Acting Group Chief Executive Officer / Chief Operating Officer commenting on the results: “2018 was undoubtedly one of the most challenging times TM has ever faced. We worked tirelessly to address the competitive landscape and industry dynamics, without losing focus on our strategies and organisational mission. We took a big hit but this has only strengthened our resolve to make good on what we need to deliver to all our stakeholders. We are continuing on our next phase of transformation via the PIP2019-2021 to ensure our resilience and long-term sustainability towards shaping a “New TM” that reinforces customer centricity. The “New TM” does not mean that we are going to emerge as something totally “different”. The “New TM” is TM as you have always known it, in an enhanced state. All that we, as an organisation, have stood for all these years still remain the same and relevant. We have always been at the frontier of each telecommunication technology evolution in the nation. Our vast and deep experience has equipped us with the right tools, people and mindset to elevate Malaysia into a Digital Nation through connectivity & digital infrastructure. The “New TM” will remain as Malaysia’s Convergence Champion for all - consumers and businesses alike. In transforming to become the ‘New TM” by 2021, we will incrementally and continuously improve on how we do things, in a new and simpler way, in order to serve you better. We will be here for our customers as a one-stop shop, enabling them to access our multitude of offerings and effortless support to fulfil all of their digital lifestyle needs. Beyond just connectivity, TM ONE, our Enterprise and Public sector cluster will focus and solidify our strength in serving 7 key industry verticals – Banking and Finance, Oil and Gas, Real Estate, Health and Education, Defence and Security, Public Shared Services and Retail. TM GLOBAL, our global and wholesale arm, will continue to serve as the industry backbone, connecting Malaysia to the world via our connectivity and digital infrastructure. Customer centricity is our true north. Our key priorities this year will be to deliver customer excellence, drive high performance whilst we continue to explore new frontiers of growth through continuous innovation that is inspired by customer insights. We will also work towards futureproofing our people through capability-building, future-skilling and new ways of working. Our philosophy of ‘customers first and simplicity’ will be at the core of everything that we do. On the customer front, we are able to serve our customers better across products from end-to-end with our converged networks of fixed and wireless; connected seamlessly with ICT infrastructure and digital platforms. In the meantime, we will continue sweating our assets to optimise performance and achieve better focus through convergence. We will leverage on connectivity to defend and grow our core business and partnership ecosystems to explore new businesses. We will also prudently manage our costs to deliver better value for investors, shareholders and stakeholders. With these priorities, we remain committed to deliver the best of our solutions and the best of experience - towards making “Life and Business Easier for a Better Malaysia”.” Prospects for the Next Financial Year Ending 31 December 2019 Year 2018 has been a challenging year for the industry. TM expects the environment to remain challenging, impacting our business operations. TM will accelerate Convergence and empower Digital in line with its transformation that reinforces Customer Centricity. The transformation plan will be anchored on the Performance Improvement Program 2019-2021 and will focus on bringing a convergence digital lifestyle to all Malaysians and on enabling enterprise and public sector industry verticals to realise their full digital potential whilst being the industry backbone, connecting Malaysia to the world.
TM performance for 1H2019
Telekom Malaysia Berhad (TM) today announced its financial results for the first half ended 30 June 2019. Financial and Operational Highlights 1H 2019 (Year-to-Date (YTD) June 2019 vs Year-to-Date (YTD) June 2018): Group Revenue of RM5.55 billion, 4.1% lower against 1H2018 – in line with market guidance- mainly due to lower contribution from all lines of products except data services. Group Reported Earnings Before Interest and Tax (EBIT) for 1H2019 grew 75.0% YTD at RM777.9 million, from RM444.5 million in 1H 2018, on the back of lower operating cost, from the Group's various cost optimisation initiatives. Group Reported Profit After Tax and Non-controlling Interests (PATAMI) rose 63.1% YTD to RM422.5 million compared to RM259.1 million. The total capital expenditure (CAPEX) was in line with guidance at 8.1% of revenue or RM450.0 million. unifi updates: Increased YTD convergence penetration to 56% of TM Households Higher net addition for unifi with more than 2.16 million broadband customer base, comprising 1.34 million unifi and 823k Streamyx customers. Completed Broadband upgrade programme in April 2019. unifi customer base continues to grow as more customers are moving up the value chain by having triple-play services (3P). #khabarbaik customer experience related initiatives in 1H2019: Streamlined all Streamyx packages to a new unifi Lite plan at a discounted price at RM69/month for existing Streamyx customers. Introduced unifi Air to elevate the internet experience of existing Streamyx customers residing in TM's LTE coverage areas Launched an All-in-one app; myunifi for a hassle-free experience in managing unifi account. Implemented 24-hour unifi installation initiative to enable new customers to set an appointment within 24 hours after registration. TM ONE updates: Enabling digital transformation of industry verticals and Public Sector to be IR4.0 ready Completed its Twin Core Data Centre with the launch of Klang Valley IP Core Data Centre (KVDC) in Cyberjaya. Started to enable the delivery of 21st century education to schools nationwide Launched Ten (10) Transformative Smart Solutions (10T) to enable a more Digital Society, Digital Business and Digital Government. Established cross-industry strategic digital collaborations to facilitate partners' digital transformation journey: Collaborated with the Government to accelerate awareness on Industry4WRD Readiness Assessment (RA) programme and the national initiative for Industry Revolution 4.0 (IR4.0). Partnered with Petronas Dagangan Berhad (PDB) to upgrade over 1,000 Petronas stations nationwide with the next generation network infrastructure. Appointed by E&P O&M Services Sdn Bhd (EPOMS), a wholly owned subsidiary of PETRONAS Carigali Sdn Bhd, as the official technology collaborator in providing end-to-end digital solutions for a more connected workforce and data management, and to digitalise its Operations and Maintenance (O&M) solutions. Strategic Partnership with Ministry of Rural Development for Desa Pintar Programme to enhance internet coverage in rural areas towards empowering rural entrepreneurs to market their products and services via digital platforms. TM GLOBAL updates: TM as the National Telecommunication Infrastructure Provider continues to serve as the industry backbone, connecting Malaysia to the world via its solid infrastructure. Strengthening its position as the trusted accelerator of business growth, TM GLOBAL serves more than 100 licensed operators in Malaysia including all major telcos leveraging on its extensive backhaul coverage and existing collaborations. TM GLOBAL connects Malaysia to the world via more than 20 direct connectivity of its submarine cables systems - spanning over 190,000 km - to more than 60 countries. Under its regional hub's Content Localisation initiative, TM GLOBAL has brought 18 global players to localise their content in Malaysia. Dato' Noor Kamarul Anuar Nuruddin, Group Chief Executive Officer, TM, commenting on the results: "We continued to face challenges in 1H 2019. However, our cost optimisation efforts continue to show results and we will keep the momentum on profitability going. We shall navigate the challenges on revenue through stronger focus on customers. We will also continue to serve as a strategic partner of the National Fiberisation Connectivity Plan (NFCP) backed by our solid network infrastructure." Our CAPEX is well within guidance as we continue to optimise investment for growth and quality improvement to better serve our customers. We will place stronger focus on our customers and this is evidenced in a number of initiatives that we have implemented thus far. We recently announced our latest #khabarbaik on the introduction of unifi Air, the new unifi Lite entry package and Streamyx repricing to reward existing customers and attract new ones onboard. We also pledged our commitment on improved service delivery, such as the implementation of 24-hour installation for new unifi sign-up, within 2-hour customer support, and a new myunifi app. The announced (copper) network upgrade is also ongoing in our commitment to enhance the overall broadband customer experience. On TM ONE, we look forward to more collaborations with strategic partners and customers in the enterprise and public sector towards enabling digitalisation and smart solutions. This is true to our role as the enabler of Malaysia's Digital Nation aspiration in this era of IR4.0." Prospects for the Financial Year Ending 31 December 2019 The Group's performance improvement initiatives and efficient cost management continue to stabilise our profitability. Our focus remains toward our customers, and to strengthen the Group's performance by investing to improve customer experience, increase customer acquisitions across all segments and grow our revenue.
TM reports operational improvement for 3Q2018 despite challenging environment
Key Highlights of 3Q2018: Group Revenue of RM2.95 billion Group Reported Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) at RM941.4 million Group Reported Loss After Tax and Non-controlling Interests (LATAMI) of RM175.6 million from impairment of network assets Key Highlights of YTD 2018: Group Revenue of RM8.73 billion Group EBITDA at RM2.55 billion Group Reported Profit After Tax and Non-controlling Interests (PATAMI) at RM83.5 million Announces Revised Dividend Policy Telekom Malaysia Berhad (TM) today announced its financial results for the quarter ended 30 September 2018. The Group saw steady operational performance, amidst heightened challenges in its operating environment, namely industry and market challenges impacting its revenue. The Group held revenue steady, at RM2.95 billion in 3Q2018, 0.3% higher from RM2.94 billion in the previous quarter, on the back of higher data as well as other telecommunication related services revenue. Group Reported Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for 3Q2018 grew 11.3% to RM941.4 million as compared to RM845.9 million in 2Q2018 mainly due to lower operating costs. Group Normalised EBITDA, which excludes non-operational items, increased 13.1%, at RM930.9 million. However, due to impairment loss on wireless and fixed network assets, the Group recorded Loss Before Interest and Tax (LBIT) at RM631.8 million for 3Q2018. Without the reported impairment and other non-operational items, the Group’s Normalised Earnings Before Interest and Tax (EBIT) is at RM315.6 million for 3Q2018, a 39.4% increase against Normalised EBIT of RM226.4 million in 2Q2018. Consequently, the Group reported Loss After Tax and Non-controlling Interests (LATAMI) of RM175.6 million compared with RM102.0 million Profit After Tax and Non-controlling Interests (PATAMI) in the prior quarter. TM’s core net profit, or Normalised PATAMI excluding non-operational items, stood at RM266.4 million, a 71.0% improvement sequentially. The total capital expenditure (CAPEX) investment for the first nine months of 2018 at RM1.32 billion, or 15.1% of revenue. This is within TM’s full year capex guidance of 19-20% of revenue. By asset type, access comprised 62% of total spending, followed by core network at 15% and the remaining 23% was for support systems. Imri Mokhtar, Acting Group Chief Executive Officer, TM said: “We continue to face various headwinds from competitive market dynamics. Nonetheless, we held revenue steady over the quarter, and saw our cost reduction initiatives bearing fruit, by recording improved operational performance for QoQ and YoY. However, in light of the continued pressure from industry and market challenges and its impact on our revenue thus far, we have taken a prudent view, by undertaking the impairment of our network assets – this resulted in close to a RM1.0 billion impairment loss this quarter.” “The operational improvement in 3Q2018 is testament to the Group’s commitment to the four (4) pillars of our Performance Improvement Programme (PIP 2018) - Revenue Uplift / Preservation, Sustained Profitability, Improved Cash Flow and Increased Productivity that will navigate us through these headwinds. We are rationalising our business, reducing operating costs and focusing our resources on the opportunities that will have the most impact,” Imri elaborated. “We currently have 2.29 million broadband customers and our unifi customer base continues to grow at 1.26 million as at end of 3Q2018 as compared to 1.06 million as at the end of the corresponding quarter last year. In terms of convergence, we saw more customers moving up the value chain with having triple-play services and above, evidenced by our convergence penetration now at 48% of TM’s household penetration compared with 39% this time last year,” he added. “We will continue to strengthen our products and services portfolio and we are stepping up how we aggressively compete in the market, with greater sales and Go-To-Market activities on the ground. We are also working hard to reach more customers with various fit-for-purpose technologies to ensure that everyone can have the benefit of higher broadband speeds and enhanced experience. On top of that, we also have continuous engagements with the Ministry and the regulator to work toward mutually beneficial outcomes - for an improved broadband experience and help build a more balanced and inclusive digital nation, whilst at the same time balancing the business sustainability of the Group and the interests of our other stakeholders.” TM also announced a revised dividend policy which states that the Company intends to distribute yearly dividends of 40 to 60% from its PATAMI. Dividends will be paid depending on overall business and earnings performance, capital commitments, financial conditions, distributable reserves and other relevant factors. The dividend policy will take effect from the next dividend declaration. “This is a matter of great importance to us. In light of the current operating landscape and after careful consideration of the potential impact on our earnings alongside our efforts to transform the Company to adapt thereto, the Board has determined the review of our dividend policy to support TM’s long-term strategic objectives.” As Malaysia’s Convergence Champion, TM remains committed to fulfilling Malaysians’ digital and communication needs of all customer segments i.e., consumer, SME, corporate enterprises, public sectors, access seekers etc via our business clusters, unifi (consumer & SME), TM ONE (Enterprise and Public sectors) and TM Global (Global and Wholesale). Prospects for the Current Financial Year Ending 31 December 2018 The recent industry challenges and market environment have had major impact to the overall revenue estimates and earnings of TM Group in the financial year. TM anticipates that the challenging environment will persist for both its retail and wholesale segments. In the midst of these challenges, TM will continue to focus towards strengthening performance of its core business and operations.
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