Telekom Q1 net profit jumps to RM308.2m on lower operating costs

Telekom's acting group CEO and chief operating office Imri Mokhtar said revenue challenges continued to persist into the first quarter of the year, with intensifying competition and price erosion.

KUALA LUMPUR: Telekom Malaysia Bhd's net profit almost doubled in the first quarter ended March 31, 2019 to RM308.28mil from RM157.15mil a year ago mainly due to a reduction in operating costs.

TM said on Thursday its revenue dipped by 2.4% to RM2.78bil from RM2.85bil a year ago. Its earnings per share were 8.2 sen compared with 4.18 sen.

Lower group revenue was due to a decline in voice, Internet and multimedia services and non-telecommunication related services revenue.

However, a reduction in operating costs saw earnings before interest and tax (Ebit) doubling to  RM504.8mil from RM195.6mil a year ago.

“Stripping off some non-operational items, such as unrealised foreign exchange loss on international trade settlement, group normalised Ebit.

On the performance of unifi, TM said revenue fell by 9.3% to RM1.23bil from RM1.35bil due to lower revenue from voice services due to lower usage, which was in line with decrease in customer base.

TM explained lower cumulative customer base for Streamyx also contributed to the decrease in revenue from Internet and multimedia services. 

“Despite decrease in revenue, Ebit however increased from RM17mil loss in the corresponding quarter last year to RM194.4mil in the current year quarter mainly due to lower operating costs,” it said.
 
TM One's revenue fell by 1.3% to RM1.00bil from RM1.016bil mainly due to voice and data services. 

Despite the lower revenue, Ebit rose by 5.1% to RM263.4mil from RM250.6mil a year ago contributed by lower operating cost.  

TM Global's revenue for the current quarter increased by 11.5% to RM578.1mil from RM518.4mil a year ago mainly contributed by both voice and data services. 

Ebit jumped by 167.4% to RM116.3mil from RM43.5mil mainlydue to lower network cost in the current year quarter. 

TM said the total capital expenditure (capex) for Q1 2019 was in line with guidance at RM151mil or 5.4% of revenue. By asset type, access comprised 67.0% of total spending, followed by core network at 18.0% and 15.0% for support systems.

Commenting on the results, its acting group CEO and chief operating office Imri Mokhtar said revenue challenges continued to persist into the first quarter of the year, with intensifying competition and price erosion. 

“However, I’m pleased to report that our Performance Improvement Programme 2019-2021 (PIP2019-2021) is yielding results. We recorded improved operational efficiency and increased profitability. 

“Our operating expenditure (Opex)/Revenue also improved by 11.4 percentage points, whilst profit for the quarter also doubled mainly from the cost optimisation efforts undertaken to counter revenue decline. 

“Our capex spending was lower compared to 1Q2018 and within our guidance, as we continued to sweat our assets and optimise our network.

“We expect the industry and competitive landscape to continuously evolve. We remain focused on delivering our strategies of accelerating convergence and empowering digital to enable a Digital Malaysia,” he said.