25 May 2022
TM records steady performance in 1Q2022 with revenue & PATAMI up 2.9% & 4.4%; maintains focus on its growth strategies execution
In the second year of its Transformation, the Group is on track to achieve its 2022 market guidance, focusing on strengthening its core businesses and investing in new growth areas
Telekom Malaysia Berhad (TM) continued its growth trajectory and long-term business sustainability, recording a steady performance in its First Quarter ended 31 March 2022 as compared to the same period last year (YoY).
The Group's operating revenue increased by 2.9% to RM2.89 billion, compared to RM2.81 billion in the same quarter last year, driven primarily by increased demand for voice, Internet and multimedia. Despite rising competition to offer converged solutions among telco and other technology players, TM continued to deliver strong customer growth across its operations.
Capitalising on its core businesses and investing into new growth areas, TM further ramped up its transformation initiatives, delivering profit after tax and non-controlling interests (PATAMI) for the quarter at RM339.9 million or 4.4% higher than the RM325.5 million recorded in 1Q2021. The Group also recorded lower financial costs subsequent to the early redemption of its RM2.0 billion sukuk in March 2021, as well as lower foreign exchange translation losses on borrowings. The Group has applied the Cukai Makmur statutory tax rate accordingly for the current quarter.
Accelerating into the second year of its Transformation, TM brought forward its manpower optimisation to enable earlier realisation of expected benefits to the Group. This, along with foreign exchange impact on trade settlement has led to a 5.0% decrease in EBIT at RM560.4 million for 1Q2022 compared to RM589.7 million in the same quarter last year. Excluding these costs, the Group's underlying EBIT is 14.0% higher at RM650.2 million compared to RM570.5 million in 1Q 2021. Free Cash Flow is lower by 15.1% at RM658.8 million compared to RM775.7 million due to higher CAPEX as the Group continues to invest in business expansion and meeting customers' demands through technology refresh and network delivery, ensuring steady growth.
unifi: Double-digit revenue and subscriber growth
unifi continued its growth performance, recording revenue increase of 10.6% from RM1.25 billion to RM1.38 billion in the current quarter. Sustained by increasing demand from Internet, voice and sales of devices, with cumulative fixed Internet subscribers increasing by 17.5% against the corresponding quarter last year. unifi remains the largest growth contributor for the Group.
unifi will continue to maintain its leadership in fixed broadband and enhance its Fixed-Mobile Convergence (FMC), enriched with TV and streaming content. This reflects its commitment to improve its FMC customer experience with better and seamless service. unifi will also grow its SME digital platform as a one-stop service centre for solutions catering especially to SMEs nationwide.
TM Wholesale (TMW): Higher revenue from increased demand for data services
TM Wholesale (TMW) also recorded a growth performance for 1Q2022, with revenue increasing by 1.2% from RM631.9 million in 1Q2021 to RM639.5 million, mainly contributed by higher revenue from voice and data services. This was underpinned by increasing demand from High-speed Broadband Access (HSBA) and higher International Voice and Data.
To date, TMW continues to enable industry broadband and 4G network via its fibre infrastructure, with the ongoing 5G rollout further strengthening that role. On the international front, it will continue to serve other OTTs and hyperscalers with connectivity and data centres, while regionally, TM Wholesale aspires to establish Malaysia as a digital hub for ASEAN via new submarine cables, enhanced data centre solutions and edge computing.
TM One: Renewed focus on growing B2B digital solutions market
TM One, the Group's enterprise and public sector arm, recorded a 7.4% decrease in revenue from RM925.2 million to RM856.8 million in 1Q2022 due to decline in data services revenue.
Strengthening and growing its B2B digital solutions, TM One has focused its efforts on high potential industry verticals, namely healthcare, manufacturing, education, oil & gas, banking, financial services & insurance (BFSI) and public sector. It has entered a partnership with Tune Protect and Huawei Malaysia that saw Tune Protect becoming the first organisation in Malaysia to host an insurance core system on public cloud (Cloud αEdge).
Commentary and Outlook from Imri Mokhtar, TM Group Chief Executive Officer
"With our economy and borders reopening, TM is powering Malaysia's journey on its road towards recovery, by ensuring the vision of an inclusive and extensive Digital Malaysia becomes a reality.
"Into the second year of our Transformation, we are focused on strengthening our core business while investing into new growth areas to meet customers' demands. In ensuring sustainability in the long run, we continue to grow our profitability to invest and seize opportunities arising from digital acceleration.
"One of these opportunities is in the exciting space of digital solutions and services for enterprises. Building on TM One's existing capability and relationships with enterprises and the public sector, we will deliver speed and agility through our new digital arm Credence: a corporate start-up led by technology leaders.
"unifi continues to better its fixed broadband and Fixed-Mobile Convergence value proposition to improve customer experience, while expanding our offerings to provide quality entertainment to customers at home or on-the-go.
"We have also achieved some key milestones in our sustainability efforts. TM One has successfully secured the Green Electricity Tariff from Tenaga Nasional Berhad for its data centres in Kuala Lumpur, Cyberjaya and Johor Bahru, contributing to a lower carbon footprint as the demand for cloud storage inevitably increases. This is in addition to the existing Green Building Index (GBI) certification earlier obtained for its core data centres. TM's broader ESG commitment also remains consistent with Malaysia's initiatives towards achieving net-zero Greenhouse Gas emission for the country by 2050.
"Meanwhile, TM Wholesale continues to establish Malaysia as a regional digital hub via new submarine cables, edge computing, data centres and supporting international connectivity. On the domestic front, TM Wholesale continues performing its role as the enabler for industry broadband, 4G and 5G network via fibre infrastructure that will transform the nation's connectivity capabilities."
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TM aspires towards a human-centred technology company in delivering digital Malaysia following successful 37th AGM
2021 a milestone first-year of the New TM Transformation Telekom Malaysia Berhad ("TM" or "the Group") today successfully concluded its 37th Annual General Meeting, with all 13 Ordinary Resolutions and one Special Resolution tabled duly approved by its shareholders. The Meeting was conducted online for a third consecutive year to allow maximum flexibility for engagement with shareholders. The event saw over 1,000 shareholders attending virtually. Hosting the proceedings for the first time, Tan Sri Mohammed Azlan Hashim, Chairman of TM's Board of Directors said, "2021 has been a milestone first-year in our New TM Transformation, with the Group setting a solid foundation as a growth-oriented PLC investing for optimum long-term returns for its shareholders, while also continuing its nation-building efforts to realise a truly Digital Malaysia." Alongside the Board of Directors, key senior leaders including Imri Mokhtar, Managing Director and Group Chief Executive Officer; and Razidan Ghazalli, Group Chief Financial Officer were also in attendance to offer insights into the 2021 Audited Financial Statements and the Group's moving forward business priorities. "In 2022, we aim to continue growing our operating revenue by strengthening our core business momentum to improve profitability, enabling us to invest for future growth. Our first quarter of 2022 recorded steady revenue growth at RM2.89 billion, an increase of 2.9% from this same period last year, despite heightened competition. We also ramped up our transformation initiatives and delivered profit after tax and non-controlling interests (PATAMI) at RM339.9 million, or 4.4% higher. We will continue to optimise cost and improve productivity in our effort to raise EBIT to more than RM1.8 billion," Imri explained. He added: "We are intensifying our efforts in the remaining seven months to deliver the next chapter of our Transformation. We will look at a total CAPEX spend between 14-18 per cent of revenue, with spending primarily focused on network expansion and modernisation together with enhancing customer experience." unifi will continue to maintain its leadership in fixed broadband and enhance its Fixed-Mobile Convergence (FMC) proposition, enriched with TV and streaming content. This reflects its commitment to improve its FMC customer experience with better and seamless service. unifi will also grow its SME digital platform as a one-stop service centre for solutions catering especially to SMEs nationwide. TM Wholesale will continue to enable industry broadband and 4G network via its fibre infrastructure, with the ongoing 5G rollout further strengthening that role. On the international front, it will further serve other OTTs and hyperscalers with connectivity and data centres, moving towards establishing Malaysia as a digital hub for ASEAN via new submarine cables, enhanced data centre solutions, and edge computing. TM One, as the sole home-based cloud service provider will also offer end-to-end managed services with robust connectivity and infrastructure. In addition to ensuring data sovereignty and security for the MyGovCloud initiative, TM One will be ramping up its data centres to support the nation's Cloud First agenda. Recognising that the future is digital, TM has also invested in strengthening its digital services through Credence, a new arm that will focus on expanding the capabilities of enterprises in their digital transformation journey. Helmed by senior leaders from the technology sector, this new business will serve existing TM customers as an end-to-end Cloud and Services solution partner, offering services from tech infrastructure to business insights, IT landscape migration, SaaS, managed services as well as analytics. While improving connectivity and digitisation solutions to enable a better Malaysia, the human factor remains the true centre of TM's growth agenda. Imri concluded: "Our aspiration is to evolve towards becoming a human-centred technology company. From our beginnings as just a fixed telco, we are now a converged telco providing voice, internet and data through both fixed and mobile technology, which further delivers content, data centre and cloud services. The next step is to evolve from delivering converged connectivity into a human-centred technology company – delivering lifestyle and business solutions for our customers with innovative digital technology and applications. "In a market where telcos and other digital players now have a play in almost every solution, customer experience will be the true differentiator in attracting and retaining customers."
TM One teams up with sap to become first local hyperscaler for partner managed cloud
This collaboration is aimed at empowering enterprise digitalisation to drive and support MyDIGITAL aspirations towards a technologically advanced economy via SAP and TM One’s Cloud infrastructure TM One, the enterprise and public sector business solutions arm of Telekom Malaysia Berhad (TM) and SAP Malaysia Sdn Bhd (SAP), recently signed a Memorandum of Understanding (MoU) for a strategic collaboration to accelerate the digital transformation of Malaysian enterprises and to improve their operating efficiency through digital solutions. The event also announced the appointment of TM One as the first local hyperscaler to become the Partner Managed Cloud (PMC) provider for SAP business suite solutions in Malaysia. With this appointment, TM One's α Edge (pronounced as Alpha Edge) will provide cloud infrastructure to empower SAP's Enterprise Resource Planning (ERP) solutions in meeting the business needs of TM One's enterprise customers. Commenting on the appointment, Shazurawati Abd Karim, Executive Vice President of TM One said, "The appointment by SAP Malaysia is another milestone for TM One as we continuously expand and strengthen our Cloud α offerings. This time, we are making available to our customers the largest sovereign-Cloud to empower SAP Business One solutions targeted at SME and medium-sized enterprises. With this solution, our customers will be able to enjoy secure, world-class Cloud-based enterprise business solutions, hosted on TM One's intelligent Cloud – α Edge cloud infrastructure. It provides unmatched Cloud connectivity and cybersecurity as well as full data residency in Malaysia." "SAP is a renowned global technology powerhouse that has accelerated the digitalisation of millions of businesses through its ERP solutions. We view this appointment as timely in TM One's continuous journey towards taking transformation forward for Malaysian enterprises. As we innovate and continue to empower our customers in the current digital economy, SAP is the right organisation to drive the digital transformation of businesses, thus elevating the country into Digital Malaysia. This befits TM Group's unique role as the enabler of Digital Malaysia's aspirations, committed to serving a more digital society, digital business, digital industry and digital Government," added Shazurawati. As SAP's PMC provider, TM One is able to offer its customers a full subscription-based model of SAP Business One hosted on TM One's α Edge, bundled with managed services. This arrangement enables organisations to migrate their enterprise systems to the Cloud with confidence, visibility, and predictability. Through this approach, TM One customers will also be able to enjoy ready-to-use fully managed solutions, rapid time-to-value, lower total cost of ownership (TCO) and scalability and flexibility in deployment. In addition, TM One is in discussions with SAP to finalise its scope of offerings by expanding the PMC programme to SAP S/4HANA Intelligent Enterprise solutions to target large enterprise customers. As part of this tie-up, TM One and SAP will also explore a co-creation and innovation partnership that entails transformation initiatives for 5G use cases, Customer Experience, Procurement & Digital Supply Chain and Human Experience Management. Meanwhile, Hong Kok Cheong, Managing Director, SAP Malaysia said: "True digital transformation is the fundamental rethinking of the customer experience, business models, and operations to find new ways in delivering value, generating revenue and improving efficiency. This can be done by leveraging intelligent technologies such as ERP solutions, Artificial Intelligence (AI) and the Cloud. With SAP solutions hosted on TM ONE's α Edge, businesses can harness the power of their data and build a truly intelligent enterprise, while accelerating trusted outcome-driven innovation, real-time decision making, and thrive in the digital economy." SAP is today the world's leading enterprise applications provider. Across the globe, SAP customers include 92% of the Forbes Global 2000 companies, 98% of the 100 most valued brands, 97% of the greenest companies (according to Newsweek), while approximately 80% of SAP's customers are SMEs. For more information about TM ONE Cloud α solutions, visit www.tmone.com.my/solutions/cloud-services and for more information on SAP, visit www.sap.com/sea/index.html.
Yayasan TM provides B40 students greater access to online learning with free sim cards
2,000 unifi Mobile #BEBAS SIM cards worth RM500,000 distributed to eligible students from B40 families through schools, institutions and in support of the Government’s initiatives. Telekom Malaysia Berhad (TM) via its foundation, Yayasan TM (YTM) recently provided free internet access to school students from B40 families nationwide to facilitate their home-based teaching and learning (PDPR) during this Movement Control Order (MCO) period. The unifi Mobile #BEBAS 15GB LTE SIM cards which come with 1-year FREE internet access worth RM250 were distributed to a total of 2,000 students, bringing the total contribution value to RM500,000. These eligible students were selected by their respective schools with priorities given to B40 students who will sit for main examinations in 2021. Commenting on the initiative, Abdul Hamid Hashim, Director of YTM said, "Every student has the right to gain equal access to education. We hope our humble effort will fulfil the students' need for internet connectivity during these challenging times so they can fully participate in the online learning process. This is even more crucial as these students will sit for important examinations this year." "YTM will continue to support TM Group's role as the trusted partner in nation building, with the focus on education and human capital development towards producing the digital workforce to enable Digital Malaysia," he added. Under the initiative, 1,200 unifi Mobile #BEBAS 15GB LTE SIM cards worth RM300,000 were distributed nationwide through Yayasan Raja Muda Selangor (300 SIM cards), District Education Offices (PPD) (300 SIM cards) and 11 schools (600 SIM cards). The 11 schools are: SMK Abi, Perlis SMK Sri Muda, Pulau Pinang SMKA Sultan Azlan Shah, Perak SMK Jalan Reko, Selangor SMK Bandar Tun Razak, Kuala Lumpur SMK Cedung Jaya, Pahang SMK Alor Akar, Pahang SMK Datuk Bendahara, Melaka SMK Tun Perak, Johor SMK Tengku Mizan Zainal Abidin, Terengganu SMK Matang Jaya, Sarawak In addition, YTM also contributed another 800 SIM cards worth RM200,000 to low-income groups through TM's Corporate Social Responsibility (CSR) programmes in support of the Government initiatives such as Tabung CERDIK and #MYBAIKHATI. Tabung CERDIK is an initiative among the Government-Linked Companies (GLC) and the Government-Linked Investment Companies (GLIC) to help B40 students with PDPR during the pandemic. Meanwhile, #MYBAIKHATI is an initiative under the People and Economic Strategic Empowerment Programme (PEMERKASA) with a similar objective, that reaches out to students from underprivileged families through PINTAR Foundation and Pusat Internet Komuniti (PIK). Yayasan TM Future Leaders Scholarship for SPM school-leavers 2021 YTM is also calling for students who have just received their SPM 2020 results to apply for Yayasan TM Future Leaders Scholarship 2021. Successful applicants will have a chance to further their studies in TM's education arm, Multimedia University (MMU). The deadline for application is on 20 June 2021; so hurry, visit http://bit.ly/yayasantmscholarship to apply or scan the below QR code: Recipients of YTM scholarships will not only receive financial aid throughout their studies but will also be attending self-development programmes while they are still in university to prepare them in entering the career world. YTM also focuses on developing talents, especially in critical thinking for leaders and future-proof workforce readiness among students after graduation. Since its establishment in 1994, YTM has awarded education sponsorship to more than 15,000 qualified students of high academic calibre from low-income families and multi-ethnic background to pursue their studies at government schools and universities in Malaysia and abroad by offering grants, bursary, allowances or financial supports with a total sponsorship value of over RM568 million. This continues to be pursued by YTM, which focuses on nurturing the right talent that will ultimately contribute to the growth of the Company, industry and nation. YTM hope that this effort will encourage the students to focus on their study and bridge the digital gap. Besides education, YTM also embarks on sustainable efforts to preserve our local heritage and culture. For more information on YTM, visit www.tm.com.my.
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