Telekom Malaysia profits decline over 80% in 2018

Telekom Malaysia’s (TM) net profit for the year ended Dec 31, 2018 (FY2018) declined 83% to RM153.154 million from RM929.749 million in FY2017.

Revenue also fell to RM11.82 billion in FY2018 from RM12.08 billion previously.

In a filing with Bursa Malaysia, TM attributed the performance to impairment of network assets recognised by the group in the third quarter of 2018, which led to a 66% decrease in operating profit before finance to RM375.5 million from RM1.10 billion previously.

An impaired asset is a company’s asset that has a market price less than the value listed on the company’s balance sheet.

For the fourth quarter ended Dec 31, 2018 (4Q18), net profit declined to RM69.66 million from RM277.01 million in 4Q17.

This is the first time in recent memory since TM posted a decline in profit in consecutive quarters.

In a separate statement, TM said its performance was impacted by persistent headwinds in the industry and operating landscape during the financial year.

Total capital expenditure (CAPEX) for FY18 stood at RM2.14 billion or 18% of revenue, lower than TM’s full-year CAPEX guidance of between 19% and 20% of revenue.

Meanwhile, TM also declared an interim cash dividend of two sen per share — a payout amounting to RM75.1 million, expected to be distributed on April 12, 2019.

“We are continuing on our next phase of transformation to ensure our resilience and long-term sustainability towards shaping a new TM that reinforces customer centricity.

“In the meantime, we will continue sweating our assets to optimise performance and achieve better focus through convergence,” acting group chief executive officer/chief operating officer Imri Mokhtar was quoted as saying in the statement.

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He added that the giant telecommunications company would also leverage on connectivity to defend and grow its core business and partnership ecosystems to explore new businesses.

Over 2.23 million customers

TM maintains a 2.23 million broadband customer base comprising of 1.3 million unifi subscribers and 936,000 Streamyx subscribers.

To date, over 911,000 unifi customers have been upgraded to 10 times their existing speed. In the same period, over 239,000 Streamyx customers have upgraded to unifi while more than, 181,000 Streamyx customers been upgraded to 2 times their existing speed (where technology permits).

For subscribers who are still waiting to be upgraded, TM said it is working very closely with the Ministry of Communications and Multimedia and the MCMC to explore specific funding options, various fit-for-purpose technologies as well as optimising existing industry mechanisms in order to deliver a better broadband experience nationwide.

A renewed customer focus

TM believes a renewed focus on customer needs is the key to turning around its fortunes. In a posting on its official Facebook page, TM said

“Customer centricity is our true north. Moving forward for 2019, our key priorities will be to deliver customer excellence, drive high performance whilst we continue to explore new frontiers of growth through continuous innovation that is inspired by customer insights. Our philosophy of ‘customers first and simplicity’ will be the core of everything that we do. We remain committed to delivering the best of our solutions and the best of experience – towards making Life and Business Easier for a Better Malaysia.”

On the topic of customer centricity, TM was handed a heavy reprimand by communications minister, Gobind Singh when a customer rant involving a tedious account termination process for an 88-year old wheelchair-bound customer went viral.

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TM’s share price stood at RM3.05/share at market close.

[via Malay Mail]

Alexander Wong