Quarterly revenue slid 1.3% to RM2.94b as the operator was affected by the regulatory MAP
By NG MIN SHEN / Pic By MUHD AMIN NAHARUL
Telekom Malaysia Bhd’s (TM) earnings dropped significantly in the first six months as revenues were pressured by higher foreign-exchange (forex) losses, and regulatory and market developments related to product pricing.
TM’s net profit plunged 51.6% to RM101.93 million in the second quarter ended June 30, 2018 (2Q18), from RM210.48 million recorded a year ago as revenues dropped, while forex loss on the group’s borrowings pressured the telecommunications company.
Quarterly revenue slid 1.3% to RM2.94 billion from RM2.98 billion registered in the corresponding quarter last year as the operator was affected by the regulatory mandated access pricing (MAP), the group said in an exchange filing yesterday.
For the first half ended June 30, 2018 (1H18), the group’s net profit dived 41.2% to RM259.09 million from RM440.92 million reported last year, while 1H18 revenue was 2.7% lower at RM5.78 billion compared to RM5.94 billion achieved in the previous year.
The communications services provider, in a separate statement, said the weaker turnover was primarily due to a decline in voice, data and other telecommunications-related services, as well as provisions recognised against wholesale revenue impacted by regulatory MAP.
TM acting group CEO Datuk Bazlan Osman said the first six months of 2018 were “very challenging” for the group, amid rapid developments in the market and increasing regulatory pressures.
“Given the current landscape, these events further added challenges to our financial performance. We expect the regulatory and sector challenges to persist in the near-to-mid term,” he stated.
The group had revised its 2018 headline key performance indicators, as well as capital expenditure guidance in July 2018, in view of the potential impact of current events on TM.
“The recent regulatory challenges and market environment have had major impact on the overall revenue estimates and earnings of TM in the current quarter.
“TM anticipates that the challenging environment will persist for both of our retail and wholesale segments. In the middle of these challenges, TM will continue our focus towards strengthening the performance of our core business and operations,” it said.
TM had earlier also launched its Performance Improvement Programme (PIP 2018), which includes four main pillars — revenue uplift, sustained profitability, improved cashflow and increased productivity.
“Undertaking these PIP 2018 initiatives are necessary measures to ensure the sustainability of our business for the long term,” Bazlan said.
Revenue from UniFi rose 0.5% to RM1.33 billion in the current quarter from RM1.327 billion last year, due to higher cumulative UniFi for home and small and medium enterprises.
UniFi profit jumped 100% to RM52 million as a result of the increase in customer base to 1.19 million as at end-June 2018 compared to 986,957 a year ago.
TM One revenue fell 2.8% to RM1.15 billion in 2Q18 on lower revenue from voice and data services, which led to profit dropping 30.2% to RM156.5 million from RM224.3 million last year.
TM Global revenue slipped 4% to RM533.2 million on data services which were affected by the estimated impact of the regulatory MAP, although profit climbed 22.5% to RM103.9 million on lower operating costs.
The group also announced yesterday that UniFi Basic — a 60GB broadband-only UniFi plan — will no longer be exclusive to households with income of less than RM4,500 per month, but will be open to all beginning September 2018.
“Affordability and accessibility of quality high-speed broadband services is important to TM, and we are committed to leading 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,” Bazlan added.
Shares of TM closed two sen, or 0.56% lower, at RM3.57 yesterday, giving it a market capitalisation of RM13.42 billion with 1.46 million shares traded.