TM's Q1 profit down 31.8% despite forex gain

PETALING JAYA: Telekom Malaysia Bhd (TM) reported a 31.8% decline in net profit to RM157.16 million for the first quarter (Q1) ended March 31 versus RM230.43 million in the previous corresponding period, due mainly to lower contribution from voice, data and other telecommunication-related services, which was partially mitigated by higher internet revenue.
This was despite a higher foreign exchange gain of RM69.1 million on the group’s borrowings for the quarter under review.
The group’s revenue dropped 3.9% to RM2.85 billion from RM2.96 billion.
TM said in a filing with the stock exchange today that as at March 31 2018, high-speed broadband unit unifi registered 1.18 million customers, while unifi mobile achieved 10% penetration of TM’s households.
Revenue from unifi increased 2% from RM1.31 billion to RM1.34 billion, thanks to higher cumulative unifi for home and small and medium enterprises.
In Q1 2018, TM spent RM327.4 million in capital expenditure, representing 11.5% of its revenue, centered mostly on major projects such as High Speed Broadband, Sub-Urban Broadband and expansion of its LTE footprint. “Of the total spent, 65% was for access, 17% was for core network, and 18% for support systems.”
Going forward, the group said its strategy, Perfexe 10, to accelerate convergence and empower digital remains relevant.
“Guided by our Perfexe 10 execution plan, we have prioritised group-wide initiatives to be more focused in delivering results faster in light of the current challenging market landscape,” it said.
TM CEO Datuk Seri Mohammed Shazalli Ramly said the group will continue to invest for long-term growth, in line with its expansion plans while ensuring that the group fully sweats its existing assets.
On Bursa Malaysia today, TM dropped 50 sen or 10.6% to RM4.20 on volume of 11.78 million shares.