TM in the red on impairment

Telco has been under pressure from the govt to improve broadband speed level and service quality


Telekom Malaysia Bhd (TM) reported a net loss of RM176 million in the third quarter ended Sept 30, 2018 (3Q18), due to the impairment losses on wireless and fixed network assets.

The telco recognised a provision of RM935 million for the impairment of fixed and wireless network assets following the continued pressure from the challenging environment, its exchange filing yesterday noted.

The broadband service provider recorded RM212 million in net profit in the same quarter last year despite revenue that grew 0.3% year-on-year (YoY) to RM2.95 billion.

Its UniFi segment was badly hurt due to the impairment as segmental profit decreased by 649.8% YoY or RM853 million against a loss of RM721 million from the RM131.2 million profit recorded last year as the operating costs are higher in the current period.

TM ONE also saw profits tumbled by 26.3% YoY or RM148 million from the RM564 million to RM416 million due to lower revenue and an increase in operating costs.

TM Global posted a profit of RM338 million in the quarter under review, up 10.5% YoY on lower operating cost from lower foreign-exchange loss position.

“We continue to face various headwinds from competitive market dynamics. We held revenue steady over the quarter and saw our cost-reduction initiatives bearing fruit, by recording improved operational performance quarter-on-quarter and YoY,” acting group CEO Imri Mokhtar noted in a statement.

TM announced a revised dividend policy to distribute yearly dividends of 40% to 60% of earnings.

TM anticipates the challenging environment will persist for both its retail and wholesale segments.

The company added that Tunku Datuk Mahmood Fawzy Tunku Muhiyiddin, its senior independent director and chairman of the nomination committee and remuneration committee, has resigned after serving the company more than 10 years.

TM has been under pressure from the government to improve the broadband speed level and service quality, while the government pushes to lower broadband prices by 25% by year-end.

The counter closed at RM2.32 yesterday, down one sen, giving it a market capitalisation of RM8.72 billion.