29 Aug 2018
TM turns in revenue of RM5.78 billion YTD for 1H2018 amidst challenging environment
|
Key Highlights of 1H2018:
|
Telekom Malaysia Berhad (TM) today announced its financial results for the first half of the year ended 30 June 2018. The Group posted revenue of RM5.78 billion year-to-date, 2.7% lower from RM5.94 billion in the corresponding period last year. This was primarily due to a decline in voice, data and other telecommunication related services as well as provisions recognised against wholesale revenue impacted by regulatory mandated access pricing.
Group Reported Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for 1H2018 was RM1.61 billion as compared to RM1.80 billion in 1H2017 mainly due to the lower revenue. Stripping off non-operational items, such as unrealised forex loss on trade settlement, Group Normalised EBITDA was 13.9% lower, at RM1.60 billion.
Group Reported Earnings Before Interest and Tax (EBIT) for 1H2018 was RM444.5 million as compared to RM560.9 million in 1H2017. Stripping off some non-operational items, in particular unrealised foreign exchange loss on international trade settlement, normalised EBIT stood at RM433.0 million.
Group Reported Profit After Tax and Non-controlling Interests (PATAMI) was at RM259.1 million, whilst Group Normalised PATAMI was RM261.1 million, after setting aside non-operational items such as unrealised forex impact on borrowings and international trade settlements.
Datuk Bazlan Osman, Acting Group Chief Executive Officer, TM said: "The first six months of 2018 has been very challenging for us, from rapid developments in the market to increasing regulatory pressures. Given the current landscape, these events further add challenges to our financial performance. Being cognizant of the potential impact to TM, we had revised our 2018 Headline KPIs as well as Capex guidance in early July 2018. Alongside this revision, we also launched our Performance Improvement Programme (PIP 2018) as a broad initiative to overcome the headwinds. The PIP 2018 is guided by four (4) main pillars - Revenue Uplift, Sustained Profitability, Improved Cash Flow and Increased Productivity. We expect the regulatory and sector challenges to persist in the near-to-midterm and undertaking these PIP 2018 initiatives are necessary measures to ensure the sustainability of our business for the long term."
The total capital expenditure (CAPEX) for 1H2018 amounted to RM710 million or equivalent to 12.3% of revenue. Of the total capex investment, 18% was allocated for Core Network, 59% was for Access, and the balance 23% for Support Systems.
“Delivering convergence and going digital remains our priority. We will continue to focus on growth, yet be more prudent in our spending and sweat our existing assets. As such, we are also revising our capex guidance for the full year to 19 – 20% of revenue.”
“We currently have 2.30 million broadband customers and 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 47% compared to just 37% in 2Q 2017,” he added.
At the media briefing, TM also announced that its unifi Basic plan, which is a 60GB broadband-only unifi plan will now be extended to everyone beginning September 2018 (no longer exclusive for households with income of less than RM4,500 per month).
“Affordability and accessibility of quality highspeed broadband services is important to TM, and we are committed to lead the charge to unlock the potential of a digitally-savvy Malaysia. As such, we are happy to announce that we are extending the unifi basic plan to all,” he concluded.
Comparison: Quarter-on-Quarter (2Q2018 vs 1Q2018 Results)
For the current quarter under review, Group Revenue stood at RM2.94 billion, higher by 3.1% QoQ mainly attributed to an increase in data, internet and other telecommunication related services.
Group EBITDA rose 10.3% QoQ to RM845.9 million from RM766.7 million the previous quarter. Stripping off non-operational items, such as unrealised forex loss on trade settlement, Group Normalised EBITDA was 5.9% higher, at RM823.4 million.
Group EBIT grew by 27.2% QoQ to RM248.9 million from RM195.6 million in 1Q2018. On a normalised basis, EBIT improved by 9.6% QoQ to RM226.4 million from RM206.6 million in 1Q2018.
Group PATAMI was at RM102.0 million, lower by 35.1% QoQ from RM157.1 million in the preceding quarter, whilst Group Normalised PATAMI was RM155.8 million QoQ, higher by 48.0% QoQ, after setting aside non-operational items such as unrealised foreign exchange impact on borrowings and international trade settlements.
Comparison: Year-on-Year (2Q2018 vs 2Q2017 Results)
For the current quarter under review, Group Revenue stood at RM2.94 billion, lower by 1.5% YoY mainly due to voice and data services.
Group EBIT stood at RM248.9 million, lower by 3.2% YoY from RM257.1 million in 2Q2017. On a normalised basis, EBIT was lower by 25.6% YoY to RM226.4 million from RM304.5 million in 2Q2017.
Group PATAMI stood at RM102.0 million, less 51.5% as compared to 2Q2017; whilst Normalised PATAMI also decreased 25.1% YoY to RM155.8 million from RM208.0 million in 2Q2017.
Prospects for the Current Financial Year Ending 31 December 2018
The recent regulatory challenges and market environment have had major impact to the overall revenue estimates and earnings of TM Group in the current quarter. TM anticipates that the challenging environment will persist for both of our retail and wholesale segments. In the midst of these challenges, TM will continue our focus towards strengthening performance of our core business and operations.
YOU MAY ALSO LIKE
TM Melaka contributes pendarfluor lamps to those in need in Melaka
In line with its vision of “Making Life and Business Easier, For A Better Malaysia”, Telekom Malaysia Berhad (TM) through TM Melaka today lit up residences of those in need particularly in Durian Tunggal area with its contribution of pendarfluor lamps. A total of 1,000 pendarfluor lamps were handed over to deserving families in Kampung Gangsa, Durian Tunggal by YB Mohd Sofi Wahab, Exco of Public Works, Transport & Public Utilities, who is also the Durian Tunggal Assemblyman. Also present at the handover ceremony was Meor Shahril Anuar Ahmad Rathuan, State General Manager, TM Melaka. The pendarfluor lamps were gathered from an upgrading exercise of the lighting system at Menara TM Melaka building which saw the replacement of pendarfluor lamps to LED lights towards a more efficient energy consumption. From the upgrading exercise, TM Melaka managed to gather a total of 3,000 pendarfluor lamps to be contributed to the beneficiary groups. This is in line with the Group’s effort in efficient waste management and recycling of usable office equipment. Meor Shahril Anuar who mooted the idea said, "TM Melaka embarked on the upgrading exercise in 2017. With the initiative, TM Melaka has recorded substantial savings in our electrical expenditure while increasing the awareness on green practices amongst the staff. Besides this upgrading exercise, at TM Melaka, we continue to support one of the three-pronged approach of the Company’s Corporate Responsibility (CR) initiatives namely the environment with various other green initiatives. This include recycling of used papers, encouraging the employees to bring their own food containers when buying food at the cafeteria as well as dissemination of periodical information on green practices to Warga Keluarga TM Melaka.” “At TM, we seek to minimise our use of materials as well as the generation of waste in order to lessen the pressure on the world’s natural resources. We employ the 3R principles of reduce, reuse and recycle throughout the Group, instilling the practice in our employees as well as those of our contractors. The distribution of the used pendafluor lamps to the communities today is an example of our initiatives towards this end. As a result of our ongoing 3R efforts, in 2017, we reduced more than 11% in solid and scheduled waste generation in TM’s selected buildings,” Meor elaborated. In addition to the Durian Tunggal area, TM Melaka will also contribute the pendarfluor lamps to those in needs in the areas of Ayer Keroh and Paya Rumput. Besides residences, the lamps will also be contributed to mosques, schools, hostels and multipurpose halls.
TM turns in revenue of RM5.78 billion YTD for 1H2018 amidst challenging environment
Key Highlights of 1H2018: Performance to-date: Group Revenue of RM5.78 billion Group Reported Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) at RM1.61 billion Group Reported Earnings Before Interest and Tax (EBIT) stood at RM444.5 million; Group Normalised EBIT at RM433.0 million Group Reported Profit After Tax and Non-controlling Interests (PATAMI) was RM259.1 million; Group Normalised PATAMI stood at RM261.1 million Telekom Malaysia Berhad (TM) today announced its financial results for the first half of the year ended 30 June 2018. The Group posted revenue of RM5.78 billion year-to-date, 2.7% lower from RM5.94 billion in the corresponding period last year. This was primarily due to a decline in voice, data and other telecommunication related services as well as provisions recognised against wholesale revenue impacted by regulatory mandated access pricing. Group Reported Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for 1H2018 was RM1.61 billion as compared to RM1.80 billion in 1H2017 mainly due to the lower revenue. Stripping off non-operational items, such as unrealised forex loss on trade settlement, Group Normalised EBITDA was 13.9% lower, at RM1.60 billion. Group Reported Earnings Before Interest and Tax (EBIT) for 1H2018 was RM444.5 million as compared to RM560.9 million in 1H2017. Stripping off some non-operational items, in particular unrealised foreign exchange loss on international trade settlement, normalised EBIT stood at RM433.0 million. Group Reported Profit After Tax and Non-controlling Interests (PATAMI) was at RM259.1 million, whilst Group Normalised PATAMI was RM261.1 million, after setting aside non-operational items such as unrealised forex impact on borrowings and international trade settlements. Datuk Bazlan Osman, Acting Group Chief Executive Officer, TM said: "The first six months of 2018 has been very challenging for us, from rapid developments in the market to increasing regulatory pressures. Given the current landscape, these events further add challenges to our financial performance. Being cognizant of the potential impact to TM, we had revised our 2018 Headline KPIs as well as Capex guidance in early July 2018. Alongside this revision, we also launched our Performance Improvement Programme (PIP 2018) as a broad initiative to overcome the headwinds. The PIP 2018 is guided by four (4) main pillars - Revenue Uplift, Sustained Profitability, Improved Cash Flow and Increased Productivity. We expect the regulatory and sector challenges to persist in the near-to-midterm and undertaking these PIP 2018 initiatives are necessary measures to ensure the sustainability of our business for the long term." The total capital expenditure (CAPEX) for 1H2018 amounted to RM710 million or equivalent to 12.3% of revenue. Of the total capex investment, 18% was allocated for Core Network, 59% was for Access, and the balance 23% for Support Systems. “Delivering convergence and going digital remains our priority. We will continue to focus on growth, yet be more prudent in our spending and sweat our existing assets. As such, we are also revising our capex guidance for the full year to 19 – 20% of revenue.” “We currently have 2.30 million broadband customers and 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 47% compared to just 37% in 2Q 2017,” he added. At the media briefing, TM also announced that its unifi Basic plan, which is a 60GB broadband-only unifi plan will now be extended to everyone beginning September 2018 (no longer exclusive for households with income of less than RM4,500 per month). “Affordability and accessibility of quality highspeed broadband services is important to TM, and we are committed to lead the charge to unlock the potential of a digitally-savvy Malaysia. As such, we are happy to announce that we are extending the unifi basic plan to all,” he concluded. Comparison: Quarter-on-Quarter (2Q2018 vs 1Q2018 Results) For the current quarter under review, Group Revenue stood at RM2.94 billion, higher by 3.1% QoQ mainly attributed to an increase in data, internet and other telecommunication related services. Group EBITDA rose 10.3% QoQ to RM845.9 million from RM766.7 million the previous quarter. Stripping off non-operational items, such as unrealised forex loss on trade settlement, Group Normalised EBITDA was 5.9% higher, at RM823.4 million. Group EBIT grew by 27.2% QoQ to RM248.9 million from RM195.6 million in 1Q2018. On a normalised basis, EBIT improved by 9.6% QoQ to RM226.4 million from RM206.6 million in 1Q2018. Group PATAMI was at RM102.0 million, lower by 35.1% QoQ from RM157.1 million in the preceding quarter, whilst Group Normalised PATAMI was RM155.8 million QoQ, higher by 48.0% QoQ, after setting aside non-operational items such as unrealised foreign exchange impact on borrowings and international trade settlements. Comparison: Year-on-Year (2Q2018 vs 2Q2017 Results) For the current quarter under review, Group Revenue stood at RM2.94 billion, lower by 1.5% YoY mainly due to voice and data services. Group EBIT stood at RM248.9 million, lower by 3.2% YoY from RM257.1 million in 2Q2017. On a normalised basis, EBIT was lower by 25.6% YoY to RM226.4 million from RM304.5 million in 2Q2017. Group PATAMI stood at RM102.0 million, less 51.5% as compared to 2Q2017; whilst Normalised PATAMI also decreased 25.1% YoY to RM155.8 million from RM208.0 million in 2Q2017. Prospects for the Current Financial Year Ending 31 December 2018 The recent regulatory challenges and market environment have had major impact to the overall revenue estimates and earnings of TM Group in the current quarter. TM anticipates that the challenging environment will persist for both of our retail and wholesale segments. In the midst of these challenges, TM will continue our focus towards strengthening performance of our core business and operations.
TM Group collaborates with MACC to combat corruption
A testament to its zero tolerance towards corruption, Telekom Malaysia Berhad Group of Companies (TM Group), following on from its recent Ikrar Bebas Rasuah (IBR) pledge continues to collaborate with Malaysia Anti-Corruption Commission (MACC). The Group has been working closely with MACC in establishing a business environment with the highest level of ethics and integrity, which include TM business partners. TM Group has also established a special unit that specifically looks into upholding high level of integrity and good governance values in the Group’s daily operations; which cover its transactions with vendors and overall partners' ecosystem. The special unit and the special officer seconded from MACC under the unit are reporting directly to the Special Integrity Committee chaired by Group Chief Executive Officer and Deputy Group Chief Executive Officer, reflecting the close ties between both organisations. With Warga Keluarga TM nationwide taking the pledge of Ikrar Bebas Rasuah (IBR) recently, the efforts have been further intensified and as a result, several arrests were recently made by MACC following internal investigations held by the Group on dubious transactions and activities. “At TM, we are committed to uphold integrity, governance and transparency, with zero tolerance of any improper and irregular practices on the part of our partners or our employees. We have always been at the forefront in championing the Company's pledge to ensure the integrity of our processes, people and reputation as well as the sustainability of our operations. This is supported by our KRISTAL values which emphasise ‘uncompromising integrity’ in all TM’s dealings with our various stakeholders,” said Dato’ Sri Mohammed Shazalli Ramly, Group Chief Executive Officer, TM. Commenting on the recent arrests of TM employees, Dato’ Seri Shazalli said, “We continue to work closely with MACC and taking off from the collaboration, we have conducted our internal investigations and inquiries which have left no stones unturned. We will go to the fullest extent to enforce the law and we never compromise on such wrongful acts of bribery, abuse of power, falsifying of information and forging of documents. So, let the recent arrests serves as a stern warning to all – including vendors, business partners and even Warga Keluarga TM.” Internally, TM has taken immediate and appropriate action to reprimand the staff and contractors concerned. TM stands by its position, as set out in its robust and thorough internal policies and processes, which are in line with industrial relations best practice. The findings of the internal investigations are then subsequently handed over to MACC for onward legal actions. We are also play a very important role to support MACC during the investigation stage. TM will always be on the lookout and will continue to investigate internally; and collaborate with MACC so there may be further cases in future as the Company continues the fight for this noble cause. “These activities of the lowest integrity will definitely affect the provisioning of communications services to the Rakyat and hamper the delivery of its benefits to Malaysians nationwide. TM Group as the one and only trusted to deliver the national communications backbone and Malaysia’s key enabler for national communications infrastructure is committed to combat such activities towards safeguarding the national interests. At the same time, we would like to thank MACC for all the co-operation and support that they have lent us in ensuring a corruption-free environment at TM,” he added.
NEWSLETTER
Just drop your details and stay updated with the world of Telekom Malaysia. We promise – no spam!