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 STATEMENT ON BUDGET 2025
TM welcomes the Government’s Budget 2025 announcement, themed “Ekonomi MADANI: Negara Makmur, Rakyat Sejahtera”, and applauds its continued focus on economic reform and uplifting the well-being of the rakyat. In line with these goals, TM is committed to playing a key role in the nation’s digitalisation journey, ensuring that technological advancements contribute to sustainable and inclusive growth that benefits businesses, MSMEs, communities, and the public sector. In line with Budget 2025’s priorities, TM continues to support digital inclusivity by collaborating with the relevant Ministries and Government agencies to enhance high-speed internet access for underserved areas and improve the quality of digital services in various industries such as education and healthcare. TM also remains dedicated to nurturing the nation’s digital talent by integrating crucial skills such as AI, IoT, cybersecurity, and cloud computing into education and training programmes through our Multimedia University (MMU) and collaborations with TVET institutions. As a trusted partner of over 400,000 MSMEs, TM supports the Government’s ongoing initiatives to strengthen this key segment through various financial initiatives. We will continue providing customised digital solutions and empower MSMEs to thrive in the digital economy. As we progress towards becoming a Digital Powerhouse by 2030, TM is well-positioned to drive Malaysia’s digital transformation. Our key investments in digital infrastructures, talent development, and sustainability will fuel the nation’s long-term growth, reinforcing Malaysia’s position as a digital hub for the ASEAN region.
MIDA as the lead agency of MITI in implementing strategies for Industry4WRD; collaborates with TM ONE for the deployment of high-speed internet connection for the nationwide programme
MIDA as the lead agency of MITI in implementing strategies for Industry4WRD; collaborates with TM One for the deployment of high-speed internet connection for the nationwide programme TM One, the enterprise and public sector business solutions arm of Telekom Malaysia Berhad (TM) had successfully deployed high speed broadband (HSBB) accessibility services to 33 industrial areas within the Northern, Southern and Eastern regions; including Sabah and Sarawak, in February 2021. The implementation is in support of Industry4WRD, a National Policy on Industry 4.0, that was launched by Ministry of International Trade and Industry (MITI), designed to transform the Malaysian manufacturing industry and its related services to be smarter, more systematic and resilient. The deployments followed the signing of a Letter of Acceptance (LOA) in July 2020 with the Malaysian Investment Development Authority (MIDA) - as the implementation agency for the Industry4WRD funds - for the installation of new high-speed internet network infrastructure to boost and secure data connectivity; accelerating Industry4WRD adoption among industry players and businesses. The deployments were completed ahead of schedule, initially aimed to be completed by June 2021, and are focused on systematically addressing and removing key connectivity bottlenecks in the priority locations. Dato' Azman Mahmud, Chief Executive Officer of MIDA commended, "We are pleased to establish this proactive engagement and collaboration with TM, through TM One; reflecting our shared commitment to ensure seamless and stable connectivity of Industry4WRD undertakings by our investors. This HSBB commitment is crucial to advance the level of digital compatibility, in strengthening Malaysia's economy amidst the pandemic and beyond." "The profound importance of high-speed internet connection to support the adoption of IR4.0 by businesses in Malaysia has led the MITI to propose for MIDA to obtain specific funding under the Industry4WRD agenda, towards the implementation of HSBB in the identified industrial areas across Malaysia. The Government has made the allocation under the Development Fund to MIDA, amounting up to RM19 million," added Dato' Azman. Meanwhile, Mohd Roslan Mohd Rashidi, Vice President Sales, TM One informed, "We are happy to announce that we had successfully completed the HSBB deployments ahead of target in these areas despite the Covid-19 situation. This collaboration with MIDA has enabled us to increase our momentum towards delivering efficient, widespread and affordable HSBB access across the country. Amidst the pandemic, industries and businesses have to leverage and keep up with the latest digital transformation trends to remain relevant in this digital age. They now rely heavily on Internet connectivity and the latest technologies to be more productive, efficient and competitive; enabling greater automation and richer insights through big data analytics. We are also seeing a shift in the way information technology is utilised through cloud computing, system integration and Internet of Things (IoT). Industries are also enhancing human capacity through artificial intelligence (AI) and autonomous robots." "A robust national digital infrastructure is the key enabler to build a high-income digital economy. In serving the digital economy, TM hopes to further enable the transformation of core processes across all priority sectors, including manufacturing, agriculture, oil and gas, besides promoting the information and communications technology (ICT) sector. This collaboration fits well in TM's unique role as the enabler of Digital Malaysia," he added. As Malaysia's national telecommunications provider, TM is a trusted institution, committed to enabling a Digital Malaysia future as an advance-tech nation with its digital and socio-economic aspirations through reliable network infrastructure and connectivity excellence. TM is ready to provide the best customer experience with innovative and reliable solutions towards fulfilling the objectives of the MyDIGITAL Malaysia Digital Economy Blueprint, and in supporting widespread quality connectivity for Malaysians nationwide.
TM ONE AND SARAWAK DIGITAL ECONOMY CORPORATION (SDEC) BERHAD EXTEND COLLABORATION TO SPUR STATE’S DIGITAL ECONOMY
KUALA LUMPUR & KUCHING, 26 DECEMBER 2024 – TM One, TM’s enterprise and government sector solutions arm, and Sarawak Digital Economy Corporation Berhad (SDEC) have announced the next phase in their strategic partnership to elevate Sarawak’s digital economy, digital society, and government services through enhanced connectivity. The parties recently exchanged a master service agreement to expand Sarawak’s digital infrastructure, aimed at enhancing connectivity and accelerating the adoption of advanced technologies and smart services in driving the state’s digital transformation. The collaboration aligns with the Sarawak Digital Economy Strategy and Post-COVID Development Strategy 2030. This collaboration includes TM One’s Metro-E solution, a flexible, secure, and high-performance bandwidth connectivity scalable to up to 10 Gbps. Its dedicated access for critical applications, proactive security monitoring and nationwide coverage addresses the service levels needed for enterprises and government agencies alike. Shazurawati Abd Karim, TM One’s Executive Vice President, said, “We are pleased to partner with SDEC in advancing Sarawak’s digital transformation. The Metro-E project will bolster Sarawak’s digital economy, fostering innovation, improving access to digital services and bridging the digital divide across locations. High-speed connectivity at these 81 sites is essential for the adoption of advanced technologies, improving customer experiences and operational efficiency. This collaboration solidifies TM One’s commitment to Sarawak’s sustainable long-term growth and digital aspirations, aligning with the state’s 2030 strategies.” The five-year project will also deliver high-speed internet connectivity to underserved and rural areas, supporting key sectors such as education, healthcare, and local businesses. This will facilitate cloud computing, telemedicine, online education, and a variety of other digital solutions, furthering Sarawak’s digital progress. The partnership reaffirms TM One and SDEC’s commitment to transform Sarawak, empowering local communities and businesses, as well as enhancing government services through digital technologies. This collaboration is another milestone in TM’s commitment to enabling Malaysia’s digital transformation and to lead industry growth through digitalisation and sustainability, a pivotal part in TM’s efforts towards becoming a Digital Powerhouse by 2030.
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