PETALING JAYA: Amid a challenging outlook, Telekom Malaysia Bhd (TM) projects a flat to low single-digit revenue growth for the financial year ending Dec 31,2021.
The telecommunications giant is also confident of raking in more than RM1.6bil in earnings before interest and tax (ebit) by the end of the year.
“We are projecting a flat to low single-digit revenue growth anchored by improvements we saw on the retail front as well as our other business lines, ” TM managing director and group CEO Imri Mokhtar said in the company’s 2020 annual report.
“This, together with the transformation and cost optimisation initiatives currently underway, has given us the confidence to project an ebit of more than RM1.6bil by end of the year, ” he added.
Prioritising return on investments, TM would expect a capital expenditure over revenue ratio of between 14% and 18%, Imri said.“These will set TM on a sustainable growth trajectory to create shareholder value and deliver on our aspirations of a more digital Malaysia, ” he added.
Imri noted the global telco sector outlook would still be challenging as the world begins its long path to recovery post the Covid-19 pandemic.
“Closer to home, revenues continue to face pressures, driven by increased commoditisation of telco connectivity services and market competition. TM needs to respond appropriately to protect and grow our group revenue, ebit margins and return on invested capital. We need to go beyond connectivity and pursue new solutions, ” he explained.
TM recently embarked on the next phase of its journey with the “New TM” transformation programme (2021-2023). Guided by the “New TM” compass of purpose, customers, performance and people, TM said it would inculcate a new performance culture that is focused on outcome and impact.
“This year will be our rebase for growth as we build a new TM, improving ebit growth with stronger revenue from our business units, better cost management and productivity from operations optimisation, and improved customer experience, ” Imri said.
“We will shift into full execution mode to transform TM into a future-proof organisation. This will set us on a sustainable growth trajectory to continue serving the nation, creating value for stakeholders and establishing ourselves as a digital enabler for society, business, government and the telco industry, ” he said.
For FY20, the telco’s net profit surged more than 60% to RM1.22bil due to lower tax charges and improvement in its subsidiaries. Its revenue for the year fell 5.2% to RM10.84bil against RM11.43bil a year ago.
Total dividend declared for FY20 stood at 14.3 sen, compared with 10 sen in FY19.