Telekom on a comeback path


Telekom Malaysia Bhd has an-nounced that it is on the “comeback path” following stronger performances from its cellular and multimedia divisions. TM Cellular Sdn Bhd, its cellular arm, has made a long awaited return to the black, posting a pre-tax profit of RM9.8mil from a loss of RM150mil for the financial year to end December. Its subscriber base is now some 1.6 million. 

For its financial year to Dec 31, Telekom posted a group profit after tax of RM1.08bil on a revenue of RM9.8bil. In 2001, it made revenues of RM9.67bil while its profit after tax was RM1.84bil.  

In that year, however, it made an exceptional gain of RM828mil from the sale of its 50% stake in Digital Phone Company of Thailand. Earnings per share for the period under review fell to 33.5 sen from 58.6 sen a year ago. 

Telekom has declared a final dividend of 10 sen per share less tax at 28%. 

Announcing its results at a press conference in Kuala Lumpur yesterday, Telekom chief executive Datuk Dr Mohd Khir Abdul Rahman said that the company's performance would have been better but higher operating expenses - the result of a RM225mil allocation for the universal service provisioning charge and RM155mil paid out in its ongoing voluntary separation scheme (VSS) - had impacted on its profits.  

The company also faced a foreign exchange loss of RM97mil against a gain of RM78mil the year before. 

Khir was particularly pleased with Telekom's 4th quarter performance, noting the improvement in collections and reduction in provision of bad debts from RM870mil in 2001 to RM596mil in 2002 after a clean-up of its subscriber base. 

TM Cellular posted a revenue of RM1.18bil, the 6.3% growth in revenue the result of a hefty increase in the number of prepaid subscribers from 393,000 in 2001 to over 1.03 million now. 

Telekom said the growth was particularly evident in the 4th quarter, with an additional 228,000 prepaid subscribers signing on.  

Its total subscriber base at the end of 2001 was 1.2 million. 

On the investment community's underweighting of Telekom as a stock, Khir acknowledged that Maxis Communications Bhd was the lead telco currently, but maintained that plans were in place for the state-owned Telekom to make a comeback. 

“If you look at the cashflow forecast for the Telekom group and its other subsidiaries, you can see that the potential for revenue growth is quite great and will pull investors back,” he said. 

Although Telekom is now playing catch up with Maxis, Khir has indicated that Telekom is confident its plan to merge the cellular operations of TM Touch with Celcom (M) Bhd's would put it back in the driver's seat.  

Synergies from the merger include an expected savings of RM350mil in operating costs and RM1.2bil in capital expenditure.  

In addition to the cellular market, Khir said Telekom would focus on pushing top line revenue in the multimedia, Internet and data businesses. 

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