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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TM’s Edge Facilities Win W. Media’s Asia Pacific Cloud And Datacenter Award For The Southeast Asian Region
Kuala Lumpur, 5 December 2023 – TM Global, the wholesale domestic and international business arm of TM, secured a prestigious accolade at this year's W.Media Asia Pacific Cloud & Datacenter Awards, for its Edge Facilities project aptly titled 'Delivering the Edge'. Effectively meeting the global demand for decentralised data hosting via co-location, this achievement solidifies TM Global's commitment to enhance the country’s digital ecosystem and position Malaysia as a trusted digital hub for the Southeast Asian region. Functioning as a regional data hosting facility, the project involves transforming existing TM exchanges into Edge Facilities across seven states, including Seberang Jaya (Penang), Tasek Ipoh (Perak), Seremban (Negeri Sembilan), Kuantan (Pahang), Kuala Terengganu (Terengganu), Kota Kinabalu (Sabah) and Kuching (Sarawak). Strategically positioned close to the edge of TM’s network, TM’s Edge Facilities significantly reduce the distance between the content hosting location and end-users. This closeness supercharges the velocity of data transmission with ultra-low latency, leading to an enhanced digital experience for all users. Commenting on this regional recognition, Khairul Liza Ibrahim, TM Global’s Executive Vice President said, "We are pleased that our innovative ideas and meticulous execution have garnered regional acclaim, and will continue these efforts in other states to meet the ever-growing data co-location demand. TM’s Edge Facilities effectively bridge the gap and seamlessly complement our existing data hosting solutions. While our large-scale data centres excel in intensive computing and data storage, TM’s Edge Facilities specialise in rapid, real-time data processing for edge computing services.” The design of TM’s Edge Facilities replicate key features of a data centre, which includes a carrier-neutral network with service level availability of 99.7%, enabling service providers to capitalise on the flourishing landscape of real-time applications. TM’s Edge Facilities significantly enhance cost-efficiency, accelerates time-to-market and offers scalability to meet the growing demands for both domestic and international service providers. By winning this prestigious award, TM Global reinforces its commitment to elevate the digital landscape and shape the future of data and cloud technology in the Southeast Asian region. Now in its third year, the award encourages industry transformation and innovation. It recognises achievement and excellence in championing the 3P’s for the cloud and data centre industry: Planet, Project and People. Winners were presented with the awards during a ceremony held at the Kowloon Shangri-La, Hong Kong on 30 November 2023. Earlier this year, TM won another two awards at the Asian Telecom Awards via TM Global. These accolades, namely “Telecom Company of the Year” and “Wholesale Company Initiative of the Year” recognised TM’s exceptional performance in spearheading significant advancements within Malaysia and the region's telecommunications landscape. The accomplishments underpin the transformation of TM Global’s wholesale business into a new era, marked by the expansion of its Edge capabilities.
Funding Societies and TMIM team up to provide digital financing access and support to MSMEs
Financial assistance for underserved local MSMEs from Funding Societies utilising Yellow Pages digital advertising solutions to help with business expansion and sustainability during these challenging times. Funding Societies Malaysia, the largest peer-to-peer (P2P) financing platform in the country and Southeast Asia recently collaborated with TM Info-Media Sdn Bhd (TMIM), a subsidiary of Telekom Malaysia Berhad (TM) to offer business financing solutions for the underserved and unserved local micro, small and medium enterprises (MSMEs). The mission kicks off into high gear with the prime utilisation of Yellow Pages' digital platform, a product of TMIM and also the leading digital business directory in Malaysia. The collaboration will provide MSMEs with greater access to digital financing solutions. The solutions will facilitate business expansions as well as ensure sustainability of the MSMEs. It provides vital financing options to existing MSMEs and serves as a launch pad to aspiring entrepreneurs. The synergistic collaboration takes momentous steps towards Funding Societies' mission to improve the livelihoods of MSMEs and TM's role as the enabler of Digital Malaysia. It also opens the door for as many as 70,000 MSMEs under the Yellow Pages listings to a variety of tailor-made financing products. With the aim of bringing game-changing revolutions to their customers, Yellow Pages Malaysia is no stranger to making innovative transformations in order to stay current in the digital age. Wong Kah Meng, Co-founder and Chief Executive Officer of Funding Societies Malaysia, commented on the partnership: "Digital financing is becoming more prevalent in Malaysia given its ability to promote financial inclusion, particularly benefiting the MSMEs that are either unserved or underserved by traditional financing avenues by providing easy access to financing solutions. As the largest P2P financing platform in the region, our partnership with TMIM will serve to accelerate our reach in providing the financing support that is much needed by our local MSME players. This is especially relevant given MSMEs are among the most impacted by the Covid-19 pandemic." Meanwhile, Sean Koh Chin Soon, Chief Executive Officer, TMIM said: "Our Malaysia Yellow Pages platform which has evolved from print to digital, interactive website and mobile app, is the perfect avenue to bridge the MSMEs out there with the resources they require. We are excited to collaborate with Funding Societies Malaysia in empowering local businesses through financial solutions. This will enable them to further expand their potentials thus supporting the sustainability of the businesses, especially during this Covid-19 pandemic. This is also in line with the Government's efforts to boost the growth of Malaysian economy and to propel local businesses. This initiative is befitting of TM Group's unique role in nation building and as the enabler of Malaysia's Digital Nation aspirations." P2P financing is a digital financing solution that has been gaining traction in recent years. Its modern approach and speedy process makes pain points of traditional financing a thing of the past. Such setbacks including collateral requirement, onerous documentation, slow turnaround time, and high minimum requirements, all posed as hurdles for smaller businesses to obtain quick financing assistance. Through this collaboration, eligible businesses on the Yellow Pages platform can apply for the financing from Funding Societies without even needing to visit a physical branch. Eligible MSMEs stand to enjoy the following financing benefits from Funding Societies: Discount on processing fee Fast disbursement with quick approval within five (5) working days Flexible tenure of up to 18 months No collateral requirement Minimal documentation requirement Besides the collaboration with Funding Societies, TM through its consumer and SME product brand, unifi has also been continuously assisting businesses to stay productive in this emerging digital economy. Via unifi Business Club (uBC) specifically for its SME customers, unifi enables access to complete business solutions which include digital marketing tools, productivity boosters and financial solutions. By allowing businesses to leverage on its strategic partnerships, unifi aims to expedite its customers' recovery and enhance sustainability. Interested MSMEs can apply for financing from Funding Societies on Yellow Pages website starting 5 October 2020. For more information on the partnership between Funding Societies and TMIM, please visit https://biz.yp.my/solutions/yellowpagesfinancing/.
TM's decision to exit menara KL concession
Telekom Malaysia Berhad ("TM" or "the Group") wishes to clarify that Menara KL ("MKL" or "Tower") is owned by the Government while the operations and maintenance of the tower is granted under a concession. TM via its wholly owned subsidiary, Menara Kuala Lumpur Sdn. Bhd. (MKLSB) had undertaken the concession since 1996. As part of its business transformation programme, TM is focusing its efforts and resources on strengthening its core business of telecommunications and technology. After due consideration on the change in the business nature of MKL, from telecommunications services to tourism and hospitality, TM has decided in October 2021 not to renew the MKL concession and informed the Government accordingly. Subsequently in 2022, the selection process of the new Concessionaire was then taken up by the Government upon which TM was informed on the appointed company to take over the shares of MKLSB and the MKL concession. MKLSB shall continue to operate the concession and ensure the continuity of MKL operations for the Malaysian public, including international visitors. Employees will remain employed with MKLSB under the new Concessionaire for a minimum period of 3 years. This is to ensure their welfare is protected in this transition. In TM’s 3Q 2022 financial announcement to Bursa Malaysia, a reference was made in the subsequent changes to shareholding in MKLSB. TM practices good governance and transparency in our business undertakings to preserve the interest of our customers and stakeholders. TM will provide our full cooperation and disclosures as required by the authorities. Building on our commitment to enable a Digital Malaysia, TM will continue to deliver the best telco and technology services for the community, businesses, Government and industry.
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