25 May 2023
TM Records a Promising 1Q2023 Performance with 2.0% Revenue Growth; Continues to Strengthen its Core Business
1Q2023 Key Highlights (vs 1Q2022)
· Operating Revenue grew 2.0% from RM2.89 billion to RM2.95 billion, with continuous growth across Unifi and TM Global
· EBIT decreased 15.5% from RM560.4 million to RM473.3 million, following accelerated depreciation and impairment
· PATAMI lower 2.9% from RM339.9 million to RM330.1 million, lower EBIT cushioned by lower net finance cost and effective tax rate
· CAPEX investment stood at 14.0% of revenue or RM413.1 million, heavily attributed to fibre network expansion
Amidst the challenges for the year, Telekom Malaysia Berhad (TM) achieved a steady and promising performance in the first quarter that ended on 31 March 2023, compared to the same period in the previous year (YoY).
Operating revenue grew 2.0% to RM2.95 billion, from RM2.89 billion in 2022, driven by Unifi and TM Global. TM saw an increase in customers with Unifi now serving close to 3.5 million home and MSME customers, TM One catering to 8,800 businesses, and TM Global serving more than 700 local and regional customers.
Its reported Earnings Before Interest and Tax (EBIT) is lower 15.5% to RM473.3 million, from RM560.4 million, following the Group’s decision to accelerate depreciation and impairment of IT assets, due to changes in market conditions.
Profit After Tax and Minority Interest (PATAMI) decreased 2.9% to RM330.1 million from RM339.9 million. Lower net finance cost and lower effective tax rate from the recognition of deferred tax assets mitigated the impact of the lower EBIT on the Group’s overall profitability.
Capital Expenditure (CAPEX) stood at 14.0% of overall revenue, or RM413.1 million. A significant portion of this investment was dedicated to fortifying its fibre infrastructure, delivering new customer acquisition, international subsea cables investment and 5G fibre network deployment to meet Government’s target of 80% coverage by year end.
Unifi sustaining growth trajectory
Unifi continues to deliver leadership in convergence service and solutions for both home and MSMEs customers. Unifi reported a 1Q2023 revenue growth of 4.3% from RM1.38 billion to RM1.44 billion contributed by both, growth in number of subscribers and average revenue per customer (ARPC).
Unifi fixed broadband subscription increased by 8.1% to 3.08 million propelled by aggressive sales, and promotions such as the 6-months complimentary speed upgrade offered to existing Unifi Home users and 7-days free viewing of all Unifi TV channels during Chinese New Year.
Unifi Mobile unveiled its latest offerings, the UNI5G prepaid and postpaid plans, which include complimentary 5G access for all current mobile subscribers. Additionally, Unifi introduced the Pakej Perpaduan Jalur Lebar Tetap (Home Internet) and Pakej Perpaduan Prabayar Mudah Alih (Prepaid Mobile) plans specifically designed for underserved communities, providing inclusive and ubiquitous connectivity for the community.
Unifi Business’ collaborative efforts with local government agencies have been instrumental in supporting MSMEs to digitally grow their businesses. As part of this initiative, Unifi Business launched a programme in Sabah that has resulted in a significant participation of local entrepreneurs.
TM One navigating challenging market and shifting demand
TM One recorded a 6.7% slowdown in revenue from RM773.7 million to RM721.9 million in the current quarter, largely due to the impact of price reduction and lower revenue from one-off customer projects.
The delivery of key projects across several industries shall set the pace for TM One in the coming quarters. TM One delivered a Private 5G solution to enable Smart Industry solutions and completed a hybrid cloud project that is instrumental to the IT backbone transformation of its customer. TM is also the only telco with a 100% completion record for the Point of Presence (POP) Phase 1 Project, successfully delivering 233 sites across the northern states, Sabah and Sarawak.
Building on the success of TM One 5G Sphere Partner Programme launched end of 2022 where more than 90 leading partners are registered today, TM One launched its Sandbox platform providing a secure and controlled environment for enterprise and Government customers with technology partners to co-create and commercialise innovative smart service solutions, which will propel their digitalisation and automation drive.
TM Global catalysing digital inclusivity
TM Global reported continuous growth in 1Q2023, with revenue increasing by 3.9% from RM625.1 million to RM649.2 million, contributed by higher data and data centre co-location services.
As the leading partner for High-Speed Broadband Access (HSBA), TM Global achieved the highest number of new installations in March, supporting collective industry growth throughout Malaysia. Additionally, close to 8,000 4G and 5G fiberisation site were deployed to meet the growing demands of industry players and enhance nationwide edge capabilities, further propelling national digital initiatives.
Internationally, TM Global secured deals from US-based hyperscaler and North Asia digital provider for its wholesale data centre solutions as well as a substantial deal from ASEAN telecommunication player for more than 10Tbps data requirement within this region. TM Global remains focused on positioning Malaysia as the preferred digital hub for the ASEAN region through its comprehensive and customised offerings for hyperscalers, global carriers and digital players.
Commentary and Outlook from Dato’ Imri Mokhtar, TM Group Chief Executive Officer
“2023 is expected to be a challenging year with changes in the regulatory landscape, heightened competition and other market structure changes. TM will continue strengthening its core business to be commercially sustainable as a Public Listed Company (PLC) whilst continuing to contribute to the nation’s growth via its role as a Government Linked Company (GLC).
“As the national connectivity and digital infrastructure provider, TM will continue to execute the fiberisation plan to support the Government’s National Digital Network (JENDELA) programmes as well as the 5G rollout nationwide. TM looks forward to continue playing an active role in the 5G implementation, leveraging its nationwide fibre infrastructure, extensive digital platforms (data centres, edge nodes) and rollout experience.
“We remain steadfast as we enter the final year of our 2021-2023 Transformation Programme, and pursue the next wave of growth beyond 2023. In line with our journey to become a human-centred TechCo, we announced the launch of TM’s new HQ and Campus, located in Cyberjaya. The campus will serve as a catalyst for a new way of working that drives agility and flexibility through digital collaboration and hybrid work environment, propelling innovation among our employees, customers and partners.
“We will continue to advocate sustainability efforts and strive for progress. TM has released our first Task Force on Climate-related Financial Disclosures (TCFD) report, 2 years ahead of Bursa Malaysia’s 2025 requirement. The report focuses on increasing transparency around the financial implications of an organisations’ climate-related risks and opportunities.
“Though cautious with the overall outlook, we remain optimistic with the prospects of increased hyperconnectivity, continuous growth investments in connectivity and digitalisation across all customer segments. TM will continue to enable a Digital Malaysia by offering comprehensive suite of communication services and digital solutions benefitting communities, businesses and Government.”
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HONOR Malaysia appoints TM One as Cloud service provider to serve customers across three continents
HONOR, a leading global provider of smart devices adopts TM One Cloud solutions – α Edge (pronounced as Alpha Edge), to serve its customers across three Telekom Malaysia Berhad (TM), via its enterprise and public sector business solutions arm TM One, recently join forces with HONOR Technology (Malaysia) Sdn Bhd, one of the leading global providers of smart devices, to provide Cloud services not only for HONOR Malaysia's customers but also across three (3) continents – namely, Asia, Africa and Latin America. This strategic alliance signals a major expansion of TM One α Edge regionally. The end-to-end comprehensive Cloud services were chosen by HONOR Malaysia to host the eCommerce platform and digital solutions, in its ongoing efforts to expand its presence in the premium market segment. Currently, HONOR has 3,000+ service centers, 2,000+ call center representatives and close to 8,000 employees globally to provide premium and efficient services to consumers in over 100 markets. The TM One α Edge is equipped to deliver the required flexibility to scale effectively for any unprecedented demands in traffic or business challenges. Shazurawati Abd Karim, Executive Vice President of TM One, commented: "Fuelled by the pandemic, the extraordinary surge in Cloud adoption by many businesses especially those connected to serving consumer markets, bodes well for future growth and recovery. This partnership marks another important growth milestone in strengthening Malaysia's position on the global front as a preferred digital destination and business hub. We are an ideal Cloud service provider for the nation and this is yet another testament to our leading role as the enabler of Digital Malaysia." Towards ensuring a stable and secured service, some of the key aspects of the α Edge portfolio for HONOR Malaysia includes a dedicated 24/7 technical team, with professional and managed services. In addition to TM One's robust global network and secured digital connectivity infrastructure, the service operates through TM One Tier-III Data Centres, to ensure benefits such as low latency coupled with reachability to customers. Meanwhile, Kee Ee Neng, Chief Financial Officer of HONOR Malaysia, commented, "It's a proud moment to be in the same alignment with TM One when it comes to digital solutions. We look forward to providing the leading technology and developing further opportunities with TM One on this exciting journey ahead." α Edge, a part of TM One Cloud α, has been designed to provide seamless migration of critical workloads to the Cloud, quickly, easily, cost-effectively, and without constraints. It comes ready to support HONOR Malaysia's IT platform and digital solutions with Artificial Intelligence (AI) capabilities, resource monitoring and identity access management, as well as advanced security tools and cybersecurity support. The strategic partnership between TM One with HONOR Malaysia leverages TM One's leading end-to-end cloud service solution designed for businesses. For further information on TM One's Cloud services, visit www.tmone.com.my/solutions/cloud-services and for more info on HONOR Malaysia, visit www.hihonor.com/global
TM supports affected small businesses and communities through “Inisiatif Tolong Menolong”
Reaching out to more than 140 SME businesses and 14,000 families nationwide as part of the ongoing Malaysia Prihatin movement. Telekom Malaysia Berhad (TM) stays committed to its efforts in lending support and aid to affected Small and Medium Enterprise (SME) businesses and communities during this challenging period of COVID-19 pandemic. In view of the immense impact of this unprecedented period, Yayasan TM (YTM), TM's social impact-based foundation and also its Corporate Responsibility arm, embarked on a food bank programme called "Inisiatif Tolong Menolong", as part of the ongoing "Malaysia Prihatin" movement. The two (2) months programme is aimed at supporting local SME businesses such as grocery stores, sundry shops and restaurants as well as community groups in need including B40 families and the homeless, who are affected by the pandemic and enforcement of Movement Control Order (MCO). For this initiative, YTM works with TM's state offices nationwide to identify the local SMEs and provide the beneficiaries with basic necessities to alleviate their burden during this challenging time. Izlyn Ramli, Director of YTM shared: "We understand that the MCO is necessary to keep Malaysians safe during this pandemic, but it brought its own challenges to our livelihood. This is where YTM and TM Group continue to lend our helping hand wherever possible, embracing the spirit of "Malaysia Prihatin" and #kitajagakita. Apart from other ongoing initiatives to help the nation bounce back, we have embarked on this nationwide "Inisiatif Tolong Menolong" that adopts a two-pronged approach – providing basic necessities to those in need by purchasing the items from the local SME businesses in the vicinity. This will help the beneficiaries while at the same time assisting in the survival of the affected local SMEs. We hope this humble assistance can make life and business easier for them, and they have a chance to rebuild their lives together." "We are also very grateful for the great support and cooperation from the TM state offices and our various stakeholders on the ground who have worked tirelessly to make this initiative a success," Izlyn concluded. The initiative, kicked off on 20 August 2021 nationwide, is set to benefit more than 140 SME businesses, which were selected as collection points for the identified 14,000 families to get their basic food supplies in their respective areas. This programme is also part of the collective humanitarian efforts of the GLC/GLIC Disaster Response Network (GDRN), for which YTM is co-chair together with Khazanah Nasional Berhad's Yayasan Hasanah, under Ministry of Finance (MOF)-GDRN PERMAI Relief Fund 2021; a matching grant announced under Initiative 6 of Pakej Bantuan Perlindungan Ekonomi & Rakyat Malaysia (PERMAI) to provide immediate relief to those adversely impacted by the COVID-19 pandemic and natural disaster. Earlier this year, TM had disbursed RM1.5 million of the TM's MOF-GDRN PERMAI Relief Fund 2021 via 17 NGOs nationwide and benefited more than 10,000 families from various backgrounds. Also under this fund, working together with Persatuan OKU Sentral and GDRN partners, TM has recently contributed a month's supply of food for front-liners and volunteers working at a Drive-Through Vaccine Center (PPV) specifically for the special needs community, including their guardians and senior citizens in Johor Bahru. To date, the TM Group including YTM has extended close to RM20 million through various initiatives to ease the lives of affected communities, and in continuous support of Malaysia's nation-building and community welfare agenda in these challenging times. YTM joins all Malaysians in prayer for the safety and health of the nation, together may we return stronger.
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