Highlight TM 1Q revenue up at RM2.77b on Internet income; profit down

by **Cals** Sat 30 May 2015, 00:55

Highlight
TM 1Q revenue up at RM2.77b on Internet income; profit down

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By Chong Jin Hun / theedgemarkets.com | May 29, 2015 : 2:02 PM MYT

KUALA LUMPUR (May 29): [size=14]Telekom Malaysia Bhd (TM) ([You must be registered and logged in to see this image.] Financial Dashboard) reported a 39% drop in first quarter net profit from a year earlier as operating and finance cost increased. Foreign exchange (forex) losses also curbed bottom line.

In a statement to the exchange today, TM (fundamental: 1; valuation: 1.1) said net profit fell to RM128.92 million in the first quarter ended March 31, 2015 (1QFY15) from RM210.63 million. Revenue, however, rose to RM2.77 billion from RM2.62 billion.

"For the current quarter under review, group revenue increased by 5.9% to RM2,774.1 million as compared to RM2,620.0 million in the same quarter last year, mainly due to higher revenue from Internet and multimedia, other telecommunication-related services and data services, partially offset by decline in voice.

"Group profit after tax and non-controlling interests (PATAMI) decreased to RM128.9 million as compared to RM210.6 million in the corresponding quarter last year primarily due to higher operating costs and higher foreign exchange losses from borrowings of the group compared to a gain in the same quarter last year arising from the weakening Malaysian ringgit against US dollar," TM said.

TM said Internet and multimedia revenue rose 14.3% as the company secured more new customers for its broadband service under the UniFi banner.

According to TM, its UniFi customer base climbed to 756,844 subscribers as at 1QFY15 from 652,578 a year earlier.

Meanwhile, TM's income statement showed that operating cost was higher at RM1.96 billion while finance expenses climbed to RM76.2 million. Net finance expenses included forex losses of RM41.2 million versus a gain of RM2.9 million previously.

Looking ahead, TM said high-speed Internet or broadband would be a crucial growth driver for the company.

The firm said this was in line with the Malaysian government's aim to increase broadband usage across the country.

"TM will continue our commitment to support the Government’s move to drive broadband adoption, accelerate household broadband penetration and increase reach, especially to the underserved, thus further bridging the digital divide.

"We believe these new (broadband) packages will further boost broadband take-up and encourage customers to upgrade to higher speeds," TM said.

At 12.30pm, TM shares rose two sen or 3% to settle at RM7.29 for a market capitalisation of RM27.11 billion.

The stock had risen 6% this year, outperforming the FBM KLCI's 0.5% decline.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
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