Time dotCom 2Q earnings up 18.3% to RM28.59m

KUALA LUMPUR: TIME DOTCOM BHD [] posted net profit of RM28.59 million in the second quarter ended June 30, 2011, which was 18.3% higher than the RM22.98 million a year ago, mainly due to a reduction in fee payments and higher dividend income.

Announcing its results on Wednesday, Aug 24 it said revenue was a marginal 0.56% higher at RM83.65 million compared with RM83.18 million primarily due to higher revenue from data services offset by lower voice and global bandwidth sales.

“Profit before tax and profit before tax margin at RM28.6 million and 34% respectively were, however, well-above the RM23.0 million and 28% reported in the corresponding period in 2010,” it said. Earnings per share were 1.13 sen compared with 0.91 sen.

Time dotCom said the higher profit was mainly due to the reduction in wayleave fees to PLUS EXPRESSWAYS BHD [] and also as mentioned in Note 5 above and higher dividend income from available-for-sale financial asset.

It explained that the group had negotiated a revision of the wayleave fee payment with PLUS in the first quarter of 2011.

Under the revision, both parties agreed to revise the 2010’s wayleave fee from RM17.6 million to RM14.1 million resulting a reduction of RM3.5 million, which was adjusted in the first quarter of 2011.

It added the revised payment schedule agreed would also lower the 2011 wayleave fee to PLUS from RM18.5 million to RM10.1 million. The annual sum of RM10.1 million will remain until 2026 after which the annual payment would further reduce to RM4.2 million per annum till 31 December 2038.

Time dotCom said prior to this, the group would have incurred RM18.5 million for the calendar year 2011 with an incremental amount of 5% compounded annually up to the calendar year 2014. Thereafter, the annual sum would be adjusted to RM4.2 million until the expiry of the agreement.

For the first half, it chalked up earnings of RM51.48 million, an increase of 23.3% from RM41.75 million in the previous corresponding period.

It said revenue rose 3.7% to RM153.71 million from RM148.22 million, mainly due to higher revenue from data services partially offset by reduction in voice revenue.

“The improved results would be attributed mainly to higher revenue, improved margins and lower wayleave fees despite a higher depreciation charge due to additional capital expenditure incurred on the group’s network expansion.