Tuesday, 23 February 2010

TM posts higher 4Q net profit

TM posts higher 4Q net profit

Written by Joseph Chin & Siti Sakinah Abdul Latif
Monday, 22 February 2010 18:17

KUALA LUMPUR: TELEKOM MALAYSIA BHD [] (TM) posted a net profit of RM170.25 million in the fourth quarter ended Dec 31, 2009 (4Q09) compared with RM164.81 million a year ago, despite lower revenue.

TM said today that for the current quarter, group revenue fell 9% to RM2.27 billion from RM2.49 billion a year ago, mainly due to lower revenue from the special project, MERS 999 (the unified emergency contact number system for the Malaysian Emergency Rescue Services). Earnings per share were 4.80 sen.

The company proposed a final gross dividend of 13 sen per share less tax at 25% (2008: a final gross dividend at 14.25 sen per share less tax at 25%) amounting to RM348 million subject to shareholders' approval in the next meeting. This is on top of the interim dividend of 10 sen amounting to RM357.7 million distributed in September last year.

"With the proposed total dividend payout of RM706 million, that brings our 12-month total return to shareholders to 38.5%, the highest among all fixed peers in the region," said CEO Datuk Zamzamzairani Mohd Isa at the briefing of the company's financial result today.

TM said excluding revenue from MERS 999, the current quarter revenue was only 1.5% lower as compared to the preceding year quarter.

Internet and multimedia revenue registered a 2.6% growth at RM402.0 million in 4Q09 from RM391.8 million recorded in 4Q08 due to growth in broadband customers (excluding Hotspot customers) to 1.43 million in 4Q09 from 1.28 million in 4Q08.

"Group profit after tax and minority interests (Patami) increased by 2.5% to RM170.2 million as compared to RM166.0 million (excluding the results of the demerged Axiata Group) in the corresponding quarter in 2008. This was mainly attributed to unrealised exchange gain on translation of foreign currency borrowings of RM47.3 million as compared to a loss of RM18.2 million in the same quarter in 2008," it said.

For FY09, group revenue dipped 0.8% to RM8.608 billion versus RM8.675 billion in FY08 mainly due to lower revenue from MERS 999 in the current financial year.

Excluding revenue from MERS 999, the current year revenue would have increased by 0.9% as compared to preceding financial year.

Operating profit before finance cost increased 46.0% to RM1.06 billion due to lower operating costs recorded in the current financial year and the absence of loss on disposal of equity investment.

For FY09, the voice segment contributed RM4 billion or 46.5% of total revenue, a decline from RM4.4 billion or 50.9% in FY08. Meanwhile, the non-voice segment is increasing its contribution to 53.5% in FY09 to RM4.6 billion from 49.1% or RM4.26 billion in FY08.

Asked on the decline of the voice segment to revenue, Zamzamzairani said that the situation is not unique, as all operators would face decline in the voice segment, adding that TM planned to offer bundle packages of data/Internet and voice to its customers for "value proposition".

"Besides fix-to-fix call, we also look at enhancing fix-to-mobile call," he added.

As for its non-voice segment, Zamzamzairani said TM would be working on upgrading its Internet service for higher speed, having more simplified bundling and enhancing its market strategy to make its service available to "as many people as possible".

"We also saw aggressive push by the mobile and WiMAX players who came onto the market with their products and services. Despite the fierce competition, TM continued to attract new customers and maintained leadership position in the broadband segment with 1.43 million customers as at the end of 2008," he added.

On the high-speed broadband (HSBB) project, Zamzamzairani said that TM has already achieved 152,000 premises, surpassing the target of 150,000 premises, adding that it is on track to commercially launch the retail service in four areas — Taman Tun Dr Ismail, Bangsar, Subang Jaya and Shah Alam — by the end of the first quarter this year.

He added that TM was looking at a total of 750,000 premises this year.

TM had spent RM516 million on the HSBB project in FY08 as the contract was signed in Sept 2008. In FY09, TM spent RM1.3 billion and expects to spend another RM2 billion for FY10.

To recap, the HSBB project is a private-public project worth RM11.3 billion, with the government pledging to finance a total of RM2.4 billion, targeting 1.3 million premises by end-2012 with network access speed from 10Mbps while for businesses, it can go up to 1Gbps.

As for the company's prospect, Zamzamzairani said TM's performance improvement programme (PIP) 2.0 would be continued to enhance customer experience.

Meanwhile, Bloomberg reported that TM is targeting revenue growth of 2% in FY10 and a further 3% in FY12. TM's stock rose to its 52-week high today, closing nine sen higher at RM3.35.


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