TM charts 51% rise in Q2 net profit on back of forex gain

• 1H 2017 net profit down 4.5% over same period in 2016 despite 0.75% revenue increase
• Unifi , multimedia services a bright spot, strong focus on consumer segment in second half

AGAINST a backdrop of strong head winds and stormy waters, as described by its Group CEO, Mohammed Shazalli Ramly, fixed line operator, Telekom Malaysia Bhd (TM) saw a 51% rise in net profit of US$49.32 million (RM210.48 million) for the three months ending June 30 compared with US$32.67 million (RM139.45 million) in the same period last year, boosted by foreign exchange gain. TM saw a RM50 million forex gain compared with a loss of RM34.7 million last year.

Its net profit in the first half fell by 4.54% to RM440.92 million compared with the same period last year despite a 0.75% increase in revenue at RM5.94 billion versus RM5.90 billion over the same six month period last year.

Quarterly revenue dropped 2.3% to RM2.98 billion from RM3.05 billion in the corresponding period last year with lower revenue contributions from data, voice as well as other telecommunication and non-telecommunication-related segments.

The big hit to revenue in the first half has come from lower government spending with Shazalli pointing out that the public sector contributes about 22% to TM’s overall revenue. Data revenue from enterprise customers and managed accounts stood at RM1.326 billion for the six month period of 2017 versus RM1.351 billion in the same period last year, a drop of 1.9%.

The bright spot in the first half has come from its internet and multimedia services segment, led by Unifi which crossed the 1 million customer mark on in July, leading the segment to register 8.5% higher revenue of RM982.3mil in the second quarter.

“TM currently has 2.36 million broadband customers where 88% of our UniFi customers are on packages of 10MB and above, compared to only 68% last year,” said Shazalli during TM’s first half financial results briefing yesterday. He also highlighted that TM’s mobility service, webe, continues to show steady growth, hitting 5.6% of TM’s household penetration for the first half of 2016.

Shazalli says TM will be making a stronger consumer focused push in the second half of the year with a slew of new products to be announced around mid Sept, including a special deal for eCommerce merchants.

TM has declared an interim dividend of 9.4sen per share of approximately RM353.2 million.

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