Telekom posts net profit of RM153m in FY18, sees better year

TM acting CEO Imri Mokhtar has called the change at TM the

KUALA LUMPUR: Telekom Malaysia reported lower net profit of RM153.15mil in the financial year ended Dec 31, 2018 as it was impacted by persistent headwinds in the industry and operating landscape but it expects this year to be better.

It announced on Tuesday, the net profit fell 83.5% from RM929.75mil in FY17 after making a provision of RM982.5mil. The provision was for the impairment of fixed and wireless network assets due to the continued pressure from challenging business, industry and economic conditions

“The group posted a revenue of RM11.82bil, 2.2% lower from RM12.09bil in 2017. Internet revenue growth during the year under review was offset by lower data, voice and other services,” it said. 

Its earnings before interest and tax (Ebit) was at RM64.6mil. However, its normalised Ebit was RM1.07bil, within 2018 guidance. 

Elaborating on the results, TM said while net profit was RM153.15mil, its normalised profit after tax and minority interest (Patami) was RM632.4mil.
 
TM said total capital expenditure (capex) investment for 2018 was RM2.14bil, or 18.1% of revenue; which was lower than its 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. 

It declared an interim cash dividend of two sen per share or RM75.1mil; with expected pay out date on April 12, 2019. 

Guidance for 2019 was revenue to between low to medium single digit decline, Ebut to be higher than 2018 level and customer satisfaction measure of 74. 

In the fourth quarter ended Dec 31, 2018, its net profit fell by 74.8% to RM69.66mil. Revenue was lower by 3.4% to RM3.08bil from RM3.19bil. Earnings per share were 1.86 sen compared with 7.37 sen.

TM's acting group CEO and chief operating officer Imri Mokhtar said 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," he said.

Imri said the “New TM” does not mean that TM was 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," he said.

Imri said in transforming to become the ‘New TM” by 2021, the group would incrementally and continuously improve on how it do things, in a new and simpler way.