TM records a 3Q18 net loss of RM175.6mil

• Posts a revenue of RM2.95 billion in 3Q18
• Has 2.29 million broadband and 1.26 million unifi subscribers

TELEKOM Malaysia Bhd (TM) on Nov 26 announced its financial results for the quarter ended Sept 30, 2018 (3Q18).

The Group posted a revenue of RM2.95 billion in 3Q18, 0.3% higher than the RM2.94 billion in the previous quarter, on the back of higher data as well as other telecommunication related services revenue.

TM reported a net loss of RM175.6 million compared with a RM102 million Profit After Tax and Non-controlling Interests (PATAMI) in the prior quarter.

The telco’s core net profit, or Normalised PATAMI excluding non-operational items, stood at RM266.4 million, a 71% improvement sequentially.

TM announced a revised dividend policy which states that the company intends to distribute yearly dividends of 40% to 60% from its PATAMI. Previously, TM’s dividend policy was to distribute its entire PATAMI to shareholders.

Dividends will be paid depending on overall business and earnings performance, capital commitments, financial conditions, distributable reserves and other relevant factors. The dividend policy will take effect from the next dividend declaration.

Group Reported Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for 3Q18 grew 11.3% to RM941.4 million as compared to RM845.9 million in 2Q18 mainly due to lower operating costs.

Group Normalised EBITDA, which excludes non-operational items, increased 13.1%, at RM930.9 million.

The total capital expenditure (capex) investment for the first nine months of 2018 at RM1.32 billion, or 15.1% of revenue. This is within TM’s full year capex guidance of 19-20% of revenue.

By asset type, access comprised 62% of total spending, followed by core network at 15% and the remaining 23% was for support systems.

Shares in TM have plunged 63% since the the beginning of the year to close at RM2.32 on Nov 26. The stock slumped to RM2.15 last month, its lowest level since October 2010, amid pressure from the government to reduce its broadband prices.

TM currently has 2.29 million broadband customers and its unifi customer base stands at 1.26 million as at end of 3Q18 compared to 1.06 million as at the end of the corresponding quarter last year.

TM acting group chief executive officer Imri Mokhtar, said: “We continue to face various headwinds from competitive market dynamics. Nonetheless, we held revenue steady over the quarter, and saw our cost reduction initiatives bearing fruit, by recording improved operational performance for QoQ and YoY.

“However, in light of the continued pressure from industry and market challenges and its impact on our revenue thus far, we have taken a prudent view, by undertaking the impairment of our network assets – this resulted in close to a RM1 billion impairment loss this quarter.

 “This is a matter of great importance to us. In light of the current operating landscape and after careful consideration of the potential impact on our earnings alongside our efforts to transform the Company to adapt thereto, the Board has determined the review of our dividend policy to support TM’s long-term strategic objectives.”