KUALA LUMPUR: Telekom Malaysia Bhd (TM) expects lower revenue growth this year, as it continues to face pressure from competitors and customer expectations of lower broadband prices.
Acting group chief executive officer/chief operating officer Imri Mokhtar said for 2019, the group is targeting a low-to-mid single-digit decline in revenue but a higher profit, driven by its cost-optimisation programme.
“The industry is facing a decline in revenue, as customers are expecting lower prices and better services.
“At TM, we need to go beyond providing connectivity to our customers. Moving forward, we need to put forward solutions, especially in digitalisation,” he told a media briefing on the group’s 2018 financial results.
Despite the lower revenue contribution, Imri said TM would continue to spend 18% to 20% of its revenue on capital expenditure to enhance connectivity and digital infrastructure.
For its Streamyx services, Imri said TM would find alternative technology to enhance the connectivity.
Imri described 2018 as “one of the most challenging” years for TM and that the firm is transforming itself to become a “customer-centric” organisation.
For the fourth quarter ended Dec 31, 2018, TM posted a 75% plunge in net profit to RM69.66mil from RM277.01mil a year ago due to higher finance costs and lower foreign-exchange gains on the group’s borrowings, as well as tax charges.
Revenue for the quarter fell 3.5% to RM3.09bil compared with RM3.2bil a year ago.
Earnings per share fell to 1.86 sen, from 7.37 sen previously. TM has declared an interim dividend of two sen per share that will be distributed on April 12.
Cumulatively, for financial year 2018 (FY18), TM posted an 83.5% decline in net profit to RM153.15mil from RM929.75mil in FY17.
TM said the plunge in its net profit was due to a provision of RM982.5mil for the impairment of fixed and wireless network assets due to the continued pressure from challenging business, industry and economic conditions.
In FY18, TM posted a revenue of RM11.82bil, 2.2% lower than RM12.09bil in FY17.
“Internet revenue growth during the year under review was offset by lower data, voice and other services,” it said.