PETALING JAYA: Telekom Malaysia Bhd’s (TM) net profit for the fourth quarter ended Dec 31, 2018 plunged 74.9% to RM69.66 million from RM277.01 million a year ago, dragged by higher finance cost and lower foreign exchange gain on the group’s borrowings, and tax charges.
Revenue for the quarter fell 3.5% to RM3.09 billion from RM3.20 billion a year ago due to decrease in data, Internet and multimedia as well as non-telecommunication related services.
For unifi, revenue fell 6.7% to RM1.29 billion from RM1.38 billion a year ago, on the back of lower revenue from voice services, in line with a drop in customer base and usage while profit rose to RM102.9 million from RM15 million a year ago due to lower operating costs.
TM ONE recorded 8.4% drop in revenue to RM1.15 billion from RM!.26 billion a year ago due to lower revenue from voice services while profit fell 31.6% to RM130.4 million from RM190.7 million a year ago due to higher operating costs.
For TM Global, revenue rose 6.8% to RM705.7 million from RM660.7 million a year ago due to higher revenue from voice services. However, profit fell 46% to RM90.3 million from RM167.1 million due to higher operating costs.
For the financial year ended Dec 31, 2018 (FY18), TM’s net profit plunged 83.5% to RM153.15 million from RM929.75 million a year ago due to the recognition of an impairment loss on network assets in the third quarter, which led to a 65.9% drop in operating profit before finance cost.
During the year, the group recognised a provision of RM982.5 million for the impairment of fixed and wireless network assets following the continued pressure from challenging business, industry and economic conditions. Its normalised net profit was RM632.4 million.
Revenue for the year fell 2.2% to RM11.82 billion from RM12.09 billion a year ago due to lower revenue from voice, data and non-telecommunication related services. Data service was affected by the provision made on estimated impact of regulatory mandated access pricing.
TM’s total capital expenditure (capex) for the year was RM2.14 billion or 18.1% of revenue, which was lower than its guidance of 19-20% of revenue. A bulk (57.4%) of the capex was spent on access while 17.8% was spent on core network and the remaining 24.8% on support systems.
In FY18, TM households saw an increased convergence penetration of 53%. The group had a total of 2.23 million broadband customers comprising 1.30 million unifi and 936,000 Streamyx customers.
Last year, over 911,000 unifi customers upgraded to 10 times existing speed, over 239,000 Streamyx customers upgraded to unifi while over 181,000 Streamyx customers upgraded to two times existing speed where technology permitted.
For those yet to be upgraded, TM said it will continue ongoing discussions with the government and the Malaysian Communications and Multimedia Commission to explore specific funding options, fit-for-purpose technologies and optimising existing industry mechanisms to deliver better broadband experience.
The group declared an interim dividend of 2 sen per share for FY18, to be paid on April 12.
For the financial year ending Dec 31, 2019, TM expects the environment to remain challenging, which will impact its business operations. It expects a low to medium single-digit decline in revenue, higher earnings before interest and tax and customer satisfaction measure of 74.
At 3.25pm, the stock was trading 3 sen or 1% lower at RM3.02 on 3,056,400 shares done.
