TM posts lower Q1 profit despite revenue increase

26 May 2011

Malaysian fixed line incumbent Telekom Malaysia™ reported a fall in net profit for the first three months of 2011, despite increased turnover in the period. The telco posted net income of MYR163.3 million (USD53.7 million), down 32.8% against the MYR242.9 million it made a year earlier, with the decline largely attributed to lower unrealised exchange gain on translation of foreign currency borrowings. Turnover for the quarter, however, increased by 1.1% year-on-year to MYR2.15 billion, with the company pointing to higher revenues from data, internet and multimedia services as key drivers; the three sectors it noted contributed 57% of the group’s total turnover for the three-month period. Data revenue increased by 6.8% in 1Q11 to MYR424.6 million, bolstered by rising demand for higher bandwidth services, while internet and multimedia services generated turnover of MUR453.4 million, a 12.7% y-o-y increase on the back of increased broadband subscriber numbers. Revenues from traditional voice services meanwhile continued to decline, with TM posting fixed voice turnover of MYR924.1 million, down from MYR968.3 million a year earlier. Earnings before interest, tax, depreciation and amortisation (EBITDA) for the company’s first quarter stood at MYR730.9 million, up 1.5% against 1Q10.

In operational terms, TM’s broadband subscriber base continued to grow, and at end-March 2011 it totalled 1.708 million, up from 1.485 million at the same date a year previously. Meanwhile, the company confirmed that its high speed broadband service, offered under the UniFi banner, had now been rolled out in 66 exchange areas, passing some 855,000 premises. Citing continued strong demand for the new product TM also revealed that to date it had activated some 86,000 UniFi customers. Fixed voice customer numbers remained broadly flat, with an increase in business access helping offset a decline in residential subscriptions. At 31 March 2011 TM had 4.317 million fixed voice customers, of which the bulk (2.710 million) were residential.

Commenting on the results, Dato Sri Zamzamzairani Mohd Isa, TM’s CEO, said: ‘We are pleased to report an encouraging start to the year … We are making steady progress in all aspects of performance and operations despite the competitive market environment.’

Malaysia, Telekom Malaysia