Yeoh expects YTL Comms to turn around

KUALA LUMPUR: YTL Power International Bhd expects its subsidiary YTL Communications Sdn Bhd to turn around within two years, managing director Tan Sri Francis Yeoh told shareholders at the company’s annual general meeting here yesterday.

A 60% subsidiary of YTL Power, YTL Communications launched its YES 4G wireless network in November last year.

“He [Yeoh] told shareholders to be patient and think that YTL Communications will turn around to become an aggressive and profitable company within two years,” said a shareholder at the AGM.

For its 1QFY12 ending Sept 30, YTL Power’s mobile broadband network division posted a loss before tax of RM94.94 million. For its FY11 ending June 30, the division posted a loss before tax of RM280.2 million on the back of RM26.6 million in revenue.

YTL Power’s net profit for FY11 increased by 11.3% to RM1.346 billion from RM1.209 billion a year ago, on the back of a 9.1% increase in revenue to RM14.663 billion from RM13.443 billion a year ago.

Yeoh said YES now has a subscriber base of over 3,000 and YTL Communications will break even when it has one million subscribers, according to the shareholder.

Yeoh told shareholders that YTL Communications will launch an Android smartphone together with an “easy to understand” price plan in January next year. The Android smartphone will be sold at half the price of an iPhone.

However, shareholders at the AGM were disappointed with YTL Power’s dividends for FY11.

YTL Power paid dividends amounting to 9.39 sen for FY11 compared with 13.13 sen for FY10, a reduction of about 29%.

“Francis [Yeoh] said the company paid less dividends compared to last year because it is preserving cash for a huge credit crunch which he [Yeoh] believes will happen in the coming year or two,” said the shareholder.

The shareholder said Yeoh believes this “huge and wild” financial turbulence will last for a year or two.

“Yeoh said he is preparing YTL Power for good growth after the ‘turbulence’ as there will be better opportunities if a company is in a good cash position,” added the shareholder.

As of end-September, YTL Power had cash reserves of RM8.155 billion against borrowings of RM15.644 billion.