25 May 2022
TM records steady performance in 1Q2022 with revenue & PATAMI up 2.9% & 4.4%; maintains focus on its growth strategies execution
In the second year of its Transformation, the Group is on track to achieve its 2022 market guidance, focusing on strengthening its core businesses and investing in new growth areas
Telekom Malaysia Berhad (TM) continued its growth trajectory and long-term business sustainability, recording a steady performance in its First Quarter ended 31 March 2022 as compared to the same period last year (YoY).
The Group's operating revenue increased by 2.9% to RM2.89 billion, compared to RM2.81 billion in the same quarter last year, driven primarily by increased demand for voice, Internet and multimedia. Despite rising competition to offer converged solutions among telco and other technology players, TM continued to deliver strong customer growth across its operations.
Capitalising on its core businesses and investing into new growth areas, TM further ramped up its transformation initiatives, delivering profit after tax and non-controlling interests (PATAMI) for the quarter at RM339.9 million or 4.4% higher than the RM325.5 million recorded in 1Q2021. The Group also recorded lower financial costs subsequent to the early redemption of its RM2.0 billion sukuk in March 2021, as well as lower foreign exchange translation losses on borrowings. The Group has applied the Cukai Makmur statutory tax rate accordingly for the current quarter.
Accelerating into the second year of its Transformation, TM brought forward its manpower optimisation to enable earlier realisation of expected benefits to the Group. This, along with foreign exchange impact on trade settlement has led to a 5.0% decrease in EBIT at RM560.4 million for 1Q2022 compared to RM589.7 million in the same quarter last year. Excluding these costs, the Group's underlying EBIT is 14.0% higher at RM650.2 million compared to RM570.5 million in 1Q 2021. Free Cash Flow is lower by 15.1% at RM658.8 million compared to RM775.7 million due to higher CAPEX as the Group continues to invest in business expansion and meeting customers' demands through technology refresh and network delivery, ensuring steady growth.
unifi: Double-digit revenue and subscriber growth
unifi continued its growth performance, recording revenue increase of 10.6% from RM1.25 billion to RM1.38 billion in the current quarter. Sustained by increasing demand from Internet, voice and sales of devices, with cumulative fixed Internet subscribers increasing by 17.5% against the corresponding quarter last year. unifi remains the largest growth contributor for the Group.
unifi will continue to maintain its leadership in fixed broadband and enhance its Fixed-Mobile Convergence (FMC), enriched with TV and streaming content. This reflects its commitment to improve its FMC customer experience with better and seamless service. unifi will also grow its SME digital platform as a one-stop service centre for solutions catering especially to SMEs nationwide.
TM Wholesale (TMW): Higher revenue from increased demand for data services
TM Wholesale (TMW) also recorded a growth performance for 1Q2022, with revenue increasing by 1.2% from RM631.9 million in 1Q2021 to RM639.5 million, mainly contributed by higher revenue from voice and data services. This was underpinned by increasing demand from High-speed Broadband Access (HSBA) and higher International Voice and Data.
To date, TMW continues to enable industry broadband and 4G network via its fibre infrastructure, with the ongoing 5G rollout further strengthening that role. On the international front, it will continue to serve other OTTs and hyperscalers with connectivity and data centres, while regionally, TM Wholesale aspires to establish Malaysia as a digital hub for ASEAN via new submarine cables, enhanced data centre solutions and edge computing.
TM One: Renewed focus on growing B2B digital solutions market
TM One, the Group's enterprise and public sector arm, recorded a 7.4% decrease in revenue from RM925.2 million to RM856.8 million in 1Q2022 due to decline in data services revenue.
Strengthening and growing its B2B digital solutions, TM One has focused its efforts on high potential industry verticals, namely healthcare, manufacturing, education, oil & gas, banking, financial services & insurance (BFSI) and public sector. It has entered a partnership with Tune Protect and Huawei Malaysia that saw Tune Protect becoming the first organisation in Malaysia to host an insurance core system on public cloud (Cloud αEdge).
Commentary and Outlook from Imri Mokhtar, TM Group Chief Executive Officer
"With our economy and borders reopening, TM is powering Malaysia's journey on its road towards recovery, by ensuring the vision of an inclusive and extensive Digital Malaysia becomes a reality.
"Into the second year of our Transformation, we are focused on strengthening our core business while investing into new growth areas to meet customers' demands. In ensuring sustainability in the long run, we continue to grow our profitability to invest and seize opportunities arising from digital acceleration.
"One of these opportunities is in the exciting space of digital solutions and services for enterprises. Building on TM One's existing capability and relationships with enterprises and the public sector, we will deliver speed and agility through our new digital arm Credence: a corporate start-up led by technology leaders.
"unifi continues to better its fixed broadband and Fixed-Mobile Convergence value proposition to improve customer experience, while expanding our offerings to provide quality entertainment to customers at home or on-the-go.
"We have also achieved some key milestones in our sustainability efforts. TM One has successfully secured the Green Electricity Tariff from Tenaga Nasional Berhad for its data centres in Kuala Lumpur, Cyberjaya and Johor Bahru, contributing to a lower carbon footprint as the demand for cloud storage inevitably increases. This is in addition to the existing Green Building Index (GBI) certification earlier obtained for its core data centres. TM's broader ESG commitment also remains consistent with Malaysia's initiatives towards achieving net-zero Greenhouse Gas emission for the country by 2050.
"Meanwhile, TM Wholesale continues to establish Malaysia as a regional digital hub via new submarine cables, edge computing, data centres and supporting international connectivity. On the domestic front, TM Wholesale continues performing its role as the enabler for industry broadband, 4G and 5G network via fibre infrastructure that will transform the nation's connectivity capabilities."
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BINTULU, 9 AUGUST 2024 – Petroliam Nasional Berhad (PETRONAS) in collaboration with TM inaugurated a Private 5G network at the PETRONAS LNG Complex in Bintulu, Sarawak – signalling further advancements in connectivity and efficiency for the energy industry. The event was attended by Minister of Digital Gobind Singh Deo, Deputy Minister of Digital Datuk Wilson Ugak Kumbong, Sarawak Deputy Minister of Utilities and Telecommunications Datuk Liwan Lagang, and Digital Nasional Berhad (DNB), the nation’s 5G network provider. Following the historic launch of Malaysia's first Private 5G network for enterprise at PETRONAS’ Regasification Terminal Sungai Udang (RGTSU) in 2022, the new Bintulu location is one of four of PETRONAS’ sites installed with the technology. The PETRONAS LNG Complex is one of the world’s largest liquefied natural gas (LNG) plants in a single location with a production capacity of 29.8 million tonnes per annum, and deployment of the 5G network is expected to improve productivity and increase operational efficiency across critical production processes. In his speech, Gobind Singh Deo emphasised the role of 5G technology in the energy sector transformation, saying, “5G is amongst the key technologies that is gaining importance in the energy sector. The technology, which offers ultra-high speed coupled with low latency communication between control hubs, production sites and vessels, helps to streamline the growing complexity in operational activities. Increased use of 5G-enabled intelligent systems such as industrial IoT, drones, robotics, extended reality (XR), and artificial intelligence (AI) enhances operational efficiency and safety. “Energy companies around the world are racing to modernise their operations, and I applaud PETRONAS, TM and DNB for taking the lead in digitalising Malaysia’s energy sector.” Meanwhile, PETRONAS Senior Vice President of LNG Assets Abang Yusuf Abang Puteh said, “PETRONAS is positioning itself at the forefront of the global technological race while meeting the evolving demands of the energy landscape. The integration of 5G with the Internet of Things (IoT), Artificial Intelligence (AI), and automation will streamline workflows, increase productivity by automating data collection, while enhancing safety across all levels.” Amar Huzaimi Md Deris, TM’s Group CEO said, “This private 5G deployment is the next phase in TM and PETRONAS’ long-standing partnership to future-proof its businesses for a sustainable future. Leveraging on advanced technologies like AI, the Enterprise 5G application is expected to yield optimum operational efficiencies for its highly secure reliable connection, real-time monitoring and analytics as well as remote maintenance. “Furthermore, this collaboration will further catalyse digital innovation and industry adoption which are key to ensure business resiliency in the future and this intent is also aligned with TM’s aspiration of becoming a Digital Powerhouse by 2030,” he added. Looking ahead, PETRONAS and TM aim to explore opportunities to transform the energy industry through potentially expanding the distribution of Private 5G networks to newer sites for greater integration and efficiency.
TM leverages Maxis’ Infra to Drive Enhanced Mobile Connectivity Nationwide
To strengthen the nation’s digital ecosystem through industry collaboration, TM will access Maxis’ 4G Multi Operator Core Network (MOCN), as well as 4G and 2G Domestic Roaming Services to enhance mobile connectivity nationwide. MOCN is a radio access network (RAN) sharing mechanism that allows different core networks to share the same RAN. Through this, TM will extend its 4G coverage across the country by leveraging Maxis’ RAN infrastructure and improve Unifi Mobile's population coverage to above 95%. Maxis will provide approximately 6,800 sites for 4G MOCN and domestic roaming (DR) services, and 10,000 sites for 2G DR, greatly benefiting all subscribers in rural and urban areas nationwide. In a ceremony today at TM HQ in Cyberjaya, Maxis was represented by its Chief Executive Officer, Goh Seow Eng, while Datuk Imri Mokhtar, Group Chief Executive Officer represented TM. Through this strategic partnership, TM and Maxis demonstrate a shared commitment to driving innovation, improving customer experiences, and contributing to the advancement of Malaysia's digital landscape. “This is a significant milestone for Maxis which represents our capabilities and track record in providing high quality mobile networks. We look forward to progressing ahead with TM on this initiative. Industry collaboration is the right way forward as it will ultimately benefit consumers with wider coverage through better cost efficiency and more efficient use of our resources,” said Goh Seow Eng. “We are witnessing an important step in the industry's collaborative efforts towards infrastructure sharing. Our partnership will elevate TM’s 4G mobile proposition to deliver exceptional customer experience for home, SME, and enterprise customers. It will complement our 5G offering, and pave the way for greater innovation and collaboration, to deliver solutions and services for all Malaysians," said Datuk Imri.
TM accorded special Kincentric COVID Resilience Award Malaysia 2020 for its efforts and proactive measures in combating Covid-19 pandemic
The Company received special recognition for its efforts and proactive measures in handling, mitigating and curbing the spread of COVID-19. Telekom Malaysia Berhad (TM) was recently awarded the Special Kincentric COVID Resilience Award Malaysia at the Kincentric Best Employers Malaysia 2020 Learning Conference and Award Ceremony which was held virtually. As the COVID-19 pandemic continues, people and organisations face unprecedented new challenges. The special awards recognise companies that have been actively managing the employee experience in the rapidly unfolding COVID-19 crisis; especially for those in critical functions ensuring business continuity and recovery. The judging criteria is based on key themes of Senior Leadership/communication, virtual work effectiveness, concern and engagement on employee wellness; supported by people practices. Badrul Hisham Ahmad, Vice President, Support Business TM who is also the Chairman of TM's COVID-19 Crisis Response Team (CRT) virtually received the award on behalf of TM. He was also one of the panelists in the sharing session among the winners of the COVID Resilience Award. Commenting on the achievement, Imri Mokhtar, Group Chief Executive Officer, TM said, "We are humbled and honoured to receive this meaningful award on behalf of all our Warga TM. In these challenging times, their dedication and commitment to serve our customers and the nation with essential connectivity have been exemplary. We would like to especially thank our COVID-19 Crisis Response Team and volunteers such as PAKAR Semboyan, TM Rovers, the 'buddies' and others behind the scenes; who have gone beyond the call of duty to ensure all are taken care of." "TM will continue to take proactive measures to curb the spread of COVID-19 for the safety of our employees, customers and stakeholders. We remain committed to help Malaysia rebuild its economy via connectivity and digital solutions. Together may we return stronger," he added. Kincentric, a Spencer Stuart Company through its Kincentric Best Employers programme gives high-performing organisations credit and visibility for the quality of their employer brand – and an edge in the talent marketplace. With 20 years of robust data on employee experience behind it, the programme measures and differentiates employers on the four (4) people-factors that are key to success, namely high employee engagement, agility, engaging leadership and talent focus. This year, Kincentric has introduced a special COVID Resilience Award to recognise organisations that have risen above and holistically supported their employees in managing the significant emotional, social and economic impact brought on by the pandemic. This award demonstrates how a great employee experience defines the ability for a business to survive and thrive, especially in critical moments.
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