26 Feb 2019
TM transformation reinforces customer centricity
Telekom Malaysia Berhad (TM) today announced its results for the financial year ended 31 December 2018. In addition, it also introduced its Performance Improvement Programme 2019- 2021(PIP2019-2021).
- Key Strategic Developments / Key Focus 2019:
- TM continues on its strategic journey to transform into “New TM” – a customer centric organisation to enable Malaysia’s Digital Nation aspirations through Connectivity and Digital Infrastructure.
- TM is extending the 4 pillars of Performance Improvement Programme 2018 (PIP2018) (Revenue Preservation & Uplift, Sustained Profitability, Improved Cash Flow and Increased Productivity) through to the next phase.
- Over the next 3 years, TM will focus on three (3) strategic pillars - Converged Services, Simplification & Digitalisation, Lean & Lower Cost, with its integrated network infrastructure together with its digital platforms and Warga TM as the enablers.
- Financial and Operational Highlights FY2018
- TM was impacted by persistent headwinds in the industry and operating landscape over 2018.
- The Group posted a revenue of RM11.82 billion, 2.2% lower from RM12.09 billion in 2017. Internet revenue growth during the year under review was offset by lower data, voice and other services.
- Group Reported Earnings Before Interest and Tax (EBIT) was at RM64.6 million. During the financial year, the Group has recognised a provision of RM982.5 million for the impairment of fixed and wireless network assets following the continued pressure from challenging business, industry and economic conditions, combined. Group’s Normalised EBIT was RM1.07 billion, within 2018 guidance. PIP2018 initiatives such as cost optimisation yielded improved operating performance despite the lower revenue.
- Group Reported Profit After Tax and Non-controlling Interests (PATAMI) was at RM153.2 million, whilst Group Normalised PATAMI was RM632.4 million.
- The total capital expenditure (CAPEX) investment for 2018 was RM2.14 billion, or 18.1% of revenue; which was lower than TM’s full year capex guidance of 19-20% of revenue. By asset type, access comprised 57.4% of total spending, followed by core network at 17.8% and the remaining 24.8% was for support systems. In 2018, investments were focused on expanding connectivity via deployment of broadband ports and mobile coverage, as well as on digital infrastructure for ICT, data centre, cloud and smart solutions.
- Sustained customer satisfaction with Customer Satisfaction Measure (TRI*M index) score of more than 73, continuing the record of above global telco average of 66.
- Broadband updates:
- Increased Convergence penetration 53% of TM Households
- 2.23 million broadband customer base comprising 1.30 million unifi and 936k Streamyx customers.
- Updates on 2018 broadband programmes:
- > 911,000 unifi customers upgraded to 10 times existing speed
- > 239,000 Streamyx customers upgraded to unifi
- > 181,000 Streamyx customers upgraded to 2 times existing speed where technology permits
- For those yet to be upgraded, TM will continue ongoing discussions with the Ministry and the Malaysian Communications and Multimedia Commission (MCMC) to explore specific funding options, various fit-for-purpose technologies as well as optimising existing industry mechanisms in order to deliver a better broadband experience nationwide.
- TM ONE:
- Focused on industry verticals of enterprise and public sector to enable customers’ digital aspiration
- Expansion of digital infrastructure with completion of twin core data centre
- TM GLOBAL
-
- Continued to fortify the industry backbone and connecting Malaysia to the world
- Declares interim cash dividend of 2.0 sen per share or RM75.1 million; with expected pay out date on 12 April 2019.
- 2019 Guidance: Revenue between low to medium single digit decline, EBIT to be higher than 2018 level and Customer Satisfaction Measure of 74.
Imri Mokhtar, Acting Group Chief Executive Officer / Chief Operating Officer commenting on the results: “2018 was undoubtedly one of the most challenging times TM has ever faced. We worked tirelessly to address the competitive landscape and industry dynamics, without losing focus on our strategies and organisational mission. We took a big hit but this has only strengthened our resolve to make good on what we need to deliver to all our stakeholders.
We are continuing on our next phase of transformation via the PIP2019-2021 to ensure our resilience and long-term sustainability towards shaping a “New TM” that reinforces customer centricity. The “New TM” does not mean that we are going to emerge as something totally “different”. The “New TM” is TM as you have always known it, in an enhanced state. All that we, as an organisation, have stood for all these years still remain the same and relevant. We have always been at the frontier of each telecommunication technology evolution in the nation. Our vast and deep experience has equipped us with the right tools, people and mindset to elevate Malaysia into a Digital Nation through connectivity & digital infrastructure. The “New TM” will remain as Malaysia’s Convergence Champion for all - consumers and businesses alike.
In transforming to become the ‘New TM” by 2021, we will incrementally and continuously improve on how we do things, in a new and simpler way, in order to serve you better. We will be here for our customers as a one-stop shop, enabling them to access our multitude of offerings and effortless support to fulfil all of their digital lifestyle needs.
Beyond just connectivity, TM ONE, our Enterprise and Public sector cluster will focus and solidify our strength in serving 7 key industry verticals – Banking and Finance, Oil and Gas, Real Estate, Health and Education, Defence and Security, Public Shared Services and Retail. TM GLOBAL, our global and wholesale arm, will continue to serve as the industry backbone, connecting Malaysia to the world via our connectivity and digital infrastructure.
Customer centricity is our true north. Our key priorities this year will be to deliver customer excellence, drive high performance whilst we continue to explore new frontiers of growth through continuous innovation that is inspired by customer insights. We will also work towards futureproofing our people through capability-building, future-skilling and new ways of working. Our philosophy of ‘customers first and simplicity’ will be at the core of everything that we do. On the customer front, we are able to serve our customers better across products from end-to-end with our converged networks of fixed and wireless; connected seamlessly with ICT infrastructure and digital platforms.
In the meantime, we will continue sweating our assets to optimise performance and achieve better focus through convergence. We will leverage on connectivity to defend and grow our core business and partnership ecosystems to explore new businesses. We will also prudently manage our costs to deliver better value for investors, shareholders and stakeholders. With these priorities, we remain committed to deliver the best of our solutions and the best of experience - towards making “Life and Business Easier for a Better Malaysia”.”
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TM PIP2019-2021 on track
1Q 2019 Profit Improves with Implementation of Initiatives Telekom Malaysia Berhad (TM) today announced its financial results for the first quarter ended 31 March 2019. Financial and Operational Highlights 1Q 2019:* Group Revenue of RM2.78 billion, 2.4% lower year-on-year (YoY) due to a decline in voice, Internet and multimedia services and non-telecommunication related services revenue. Group Reported Earnings Before Interest and Tax (EBIT) at RM504.8 million, doubled YoY from RM195.6 million in 1Q 2018, mainly due to reduction in operating costs. Stripping off some non-operational items, such as unrealised foreign exchange loss on international trade settlement, Group Normalised EBIT also more than doubled to RM513.0 million from RM206.6 million last year. Group Reported Profit After Tax and Non-controlling Interests (PATAMI) jumped 96.2% YoY from RM157.1 million in 1Q 2018 to RM308.3 million, whilst Group Normalised PATAMI more than doubled to RM296.4 million. The total capital expenditure (CAPEX) for 1Q 2019 was in line with guidance at RM151.0 million, or 5.4% of revenue. By asset type, access comprised 67.0% of total spending, followed by core network at 18.0% and 15.0% for support systems * 1Q2019 Results are after incorporation of impact from the adoption of Malaysian Financial Reporting Standard 16 Leases (MFRS 16) unifi updates: Increased Convergence penetration to 56% of TM Households 2.19 million broadband customer base comprising 1.32 million unifi and 871k Streamyx customers. Completed Broadband upgrade programme in April 2019: 973,000 unifi customers upgraded to 10 times existing speed 266,000 Streamyx customers in unifi coverage areas upgraded to unifi 226,000 Streamyx customers in non-unifi coverage areas upgraded to 2 times existing speed where technology permits Showcased the nation's first pre-5G via Time Division Duplex (TDD) technology as part of unifi's journey towards powering the nation with 5G Customer experience related initiatives 1Q2019: Launched #khabarbaik movement Introduced simpler and more affordable broadband and mobile plans Initiated 24-hour unifi service installation Extended the operations of selected TMpoint outlets to 7 days a week TM ONE: Expanded its digital infrastructure with the launch of Klang Valley IP Core Data Centre (KVDC) in Cyberjaya completing TM ONE's Twin Core Data Centre; certified by the Uptime Institute as Tier III in design and in constructed facility Established cross-industry strategic digital collaborations to facilitate partners' digital transformation journey TM GLOBAL: Continued to fortify the industry backbone and connecting Malaysia to the world Imri Mokhtar, Acting Group Chief Executive Officer / Chief Operating Officer commenting on the results: "As expected, revenue challenges continued to persist into the first quarter of the year, with intensifying competition and price erosion. However, I'm pleased to report that our Performance Improvement Programme 2019-2021 (PIP2019-2021) is yielding results. We recorded improved operational efficiency and increased profitability. Our operating Expenditure (Opex)/Revenue also improved by 11.4 percentage points, whilst profit for the quarter also doubled mainly from the cost optimisation efforts undertaken to counter revenue decline. Our CAPEX spending was lower compared to 1Q2018 and within our guidance, as we continued to sweat our assets and optimise our network. We expect the industry and competitive landscape to continuously evolve. We remain focused on delivering our strategies of accelerating convergence and empowering digital to enable a Digital Malaysia; whilst we strengthen our resilience with our PIP initiatives and improve on customer experience." Prospects for the Financial Year Ending 31 December 2019 The market is increasingly competitive, with players exploring opportunities to sustain and grow their business. We saw the Performance Improvement Programme 2019 – 2021 (PIP2019-2021) yield improved profitability for the Group in Quarter 1, 2019. In the coming months, we will continue to focus on our strategic pillars of "Converged Services", "Simple and Digital" and "Lean and Lower Cost" in our daily operations to drive our performance and generate more value.
TM transformation reinforces customer centricity
Telekom Malaysia Berhad (TM) today announced its results for the financial year ended 31 December 2018. In addition, it also introduced its Performance Improvement Programme 2019- 2021(PIP2019-2021). Key Strategic Developments / Key Focus 2019: TM continues on its strategic journey to transform into “New TM” – a customer centric organisation to enable Malaysia’s Digital Nation aspirations through Connectivity and Digital Infrastructure. TM is extending the 4 pillars of Performance Improvement Programme 2018 (PIP2018) (Revenue Preservation & Uplift, Sustained Profitability, Improved Cash Flow and Increased Productivity) through to the next phase. Over the next 3 years, TM will focus on three (3) strategic pillars - Converged Services, Simplification & Digitalisation, Lean & Lower Cost, with its integrated network infrastructure together with its digital platforms and Warga TM as the enablers. Financial and Operational Highlights FY2018 TM was impacted by persistent headwinds in the industry and operating landscape over 2018. The Group posted a revenue of RM11.82 billion, 2.2% lower from RM12.09 billion in 2017. Internet revenue growth during the year under review was offset by lower data, voice and other services. Group Reported Earnings Before Interest and Tax (EBIT) was at RM64.6 million. During the financial year, the Group has recognised a provision of RM982.5 million for the impairment of fixed and wireless network assets following the continued pressure from challenging business, industry and economic conditions, combined. Group’s Normalised EBIT was RM1.07 billion, within 2018 guidance. PIP2018 initiatives such as cost optimisation yielded improved operating performance despite the lower revenue. Group Reported Profit After Tax and Non-controlling Interests (PATAMI) was at RM153.2 million, whilst Group Normalised PATAMI was RM632.4 million. The total capital expenditure (CAPEX) investment for 2018 was RM2.14 billion, or 18.1% of revenue; which was lower than TM’s full year capex guidance of 19-20% of revenue. By asset type, access comprised 57.4% of total spending, followed by core network at 17.8% and the remaining 24.8% was for support systems. In 2018, investments were focused on expanding connectivity via deployment of broadband ports and mobile coverage, as well as on digital infrastructure for ICT, data centre, cloud and smart solutions. Sustained customer satisfaction with Customer Satisfaction Measure (TRI*M index) score of more than 73, continuing the record of above global telco average of 66. Broadband updates: Increased Convergence penetration 53% of TM Households 2.23 million broadband customer base comprising 1.30 million unifi and 936k Streamyx customers. Updates on 2018 broadband programmes: > 911,000 unifi customers upgraded to 10 times existing speed > 239,000 Streamyx customers upgraded to unifi > 181,000 Streamyx customers upgraded to 2 times existing speed where technology permits For those yet to be upgraded, TM will continue ongoing discussions with the Ministry and the Malaysian Communications and Multimedia Commission (MCMC) to explore specific funding options, various fit-for-purpose technologies as well as optimising existing industry mechanisms in order to deliver a better broadband experience nationwide. TM ONE: Focused on industry verticals of enterprise and public sector to enable customers’ digital aspiration Expansion of digital infrastructure with completion of twin core data centre TM GLOBAL Continued to fortify the industry backbone and connecting Malaysia to the world Declares interim cash dividend of 2.0 sen per share or RM75.1 million; with expected pay out date on 12 April 2019. 2019 Guidance: Revenue between low to medium single digit decline, EBIT to be higher than 2018 level and Customer Satisfaction Measure of 74. Imri Mokhtar, Acting Group Chief Executive Officer / Chief Operating Officer commenting on the results: “2018 was undoubtedly one of the most challenging times TM has ever faced. We worked tirelessly to address the competitive landscape and industry dynamics, without losing focus on our strategies and organisational mission. We took a big hit but this has only strengthened our resolve to make good on what we need to deliver to all our stakeholders. We are continuing on our next phase of transformation via the PIP2019-2021 to ensure our resilience and long-term sustainability towards shaping a “New TM” that reinforces customer centricity. The “New TM” does not mean that we are going to emerge as something totally “different”. The “New TM” is TM as you have always known it, in an enhanced state. All that we, as an organisation, have stood for all these years still remain the same and relevant. We have always been at the frontier of each telecommunication technology evolution in the nation. Our vast and deep experience has equipped us with the right tools, people and mindset to elevate Malaysia into a Digital Nation through connectivity & digital infrastructure. The “New TM” will remain as Malaysia’s Convergence Champion for all - consumers and businesses alike. In transforming to become the ‘New TM” by 2021, we will incrementally and continuously improve on how we do things, in a new and simpler way, in order to serve you better. We will be here for our customers as a one-stop shop, enabling them to access our multitude of offerings and effortless support to fulfil all of their digital lifestyle needs. Beyond just connectivity, TM ONE, our Enterprise and Public sector cluster will focus and solidify our strength in serving 7 key industry verticals – Banking and Finance, Oil and Gas, Real Estate, Health and Education, Defence and Security, Public Shared Services and Retail. TM GLOBAL, our global and wholesale arm, will continue to serve as the industry backbone, connecting Malaysia to the world via our connectivity and digital infrastructure. Customer centricity is our true north. Our key priorities this year will be to deliver customer excellence, drive high performance whilst we continue to explore new frontiers of growth through continuous innovation that is inspired by customer insights. We will also work towards futureproofing our people through capability-building, future-skilling and new ways of working. Our philosophy of ‘customers first and simplicity’ will be at the core of everything that we do. On the customer front, we are able to serve our customers better across products from end-to-end with our converged networks of fixed and wireless; connected seamlessly with ICT infrastructure and digital platforms. In the meantime, we will continue sweating our assets to optimise performance and achieve better focus through convergence. We will leverage on connectivity to defend and grow our core business and partnership ecosystems to explore new businesses. We will also prudently manage our costs to deliver better value for investors, shareholders and stakeholders. With these priorities, we remain committed to deliver the best of our solutions and the best of experience - towards making “Life and Business Easier for a Better Malaysia”.” Prospects for the Next Financial Year Ending 31 December 2019 Year 2018 has been a challenging year for the industry. TM expects the environment to remain challenging, impacting our business operations. TM will accelerate Convergence and empower Digital in line with its transformation that reinforces Customer Centricity. The transformation plan will be anchored on the Performance Improvement Program 2019-2021 and will focus on bringing a convergence digital lifestyle to all Malaysians and on enabling enterprise and public sector industry verticals to realise their full digital potential whilst being the industry backbone, connecting Malaysia to the world.
TM Delivers resilient FY2020 performance well positioned to accelerate MyDIGITAL aspirations
Improved FY2020 business performance amidst challenging environment; cost optimisation initiatives continue to drive profitability growth Committed to enabling Digital Malaysia towards MyDIGITAL growth aspirations Embarks on new TM transformation anchored on Value Programs with higher execution tempo Key Highlights FY2020 Financials: ❖ The Group posted a revenue of RM10.84 billion, 5.2% lower from RM11.43 billion in 2019. ❖ Group Reported Earnings Before Interest and Tax (EBIT) increased by 2.3% YoY to RM1.60 billion, from RM1.57 billion in FY2019. ❖ Strong Group Reported Profit After Tax and Non-Controlling Interests (PATAMI) growth of 60.6% YoY at RM1.02 billion compared to RM632.7 million. ❖ Total capital expenditure (capex) for FY2020 at 13.7% of revenue or RM1.49 billion. FY2020 Business Operations: Good underlying momentum ❖ unifi: Continues convergence leadership with growth in broadband and mobile customers; highest convergence take-up of TM households at 60%. ❖ TM ONE: Taking transformation forward to enable the digital transformation journey of enterprise and public sector customers with comprehensive suite of connectivity, cloud, data centre and smart solutions. ❖ TM Wholesale: Strengthens domestic and international ecosystem with telcos, digital service providers and hyperscalers to position Malaysia as a digital hub in ASEAN. ❖ TM is committed to Environmental, Social and Corporate Governance (ESG) Sustainability, building on our strong track record. Moving Forward: ❖ New TM transformation: Embarks on new trajectory anchored on key Value Programs with higher execution tempo ❖ 2021 Market Guidance: Revenue to be flat to low single digit growth, EBIT to be more than RM1.6 billion and CAPEX to be between 14% to 18% of revenue. ❖ TM is well positioned to play a significant role in MyDIGITAL - covering digital connectivity (fibre, 5G, international connectivity), digital infrastructure (cloud, data centre and cybersecurity) as well as digital skillsets and talents (via Multimedia University and TM Digital Academy). Appointed sole home-based Cloud Service Provider (CSP). A Resilient Business Performance for FY2020 Telekom Malaysia Bhd (TM) today reported its Financial Results for the full year ended 31 December 2020. TM Group Revenue recorded RM10.84 billion as compared to RM11.43 billion in FY2019, lower by 5.2% in the face of market and pandemic challenges. TM’s performance improvement programs continued to bear fruit, with EBIT and PATAMI growth recorded from the previous year. Group EBIT for FY2020 rose by 2.3% YoY to RM1.60 billion, from RM1.57 billion in FY2019, on the back of lower operating cost, from the Group’s ongoing momentum of its cost optimisation and productivity programmes. This subsequently led to a strong 60.6% YoY growth in Group PATAMI to RM1.02 billion from RM632.7 million last year. In 2020, the Company invested 13.7% of revenue in capex amounting to RM1.49 billion as it continued to optimise and modernise its network as well as sweating its assets. Of the amount spent, 53% was for network access, 22% for core network, and the balance 25% for support systems. This has ensured that TM’s network was able to effectively manage the network traffic that has surged over the period of the Movement Control Order (MCO). For shareholders, TM is committed to continually increase shareholder value and declared a Final Interim Dividend of 7.5 sen per share with a total payout amounting to RM283.0 million for the financial year of 2020. TM is also committed to sustainable growth, with increased emphasis on ESG, building on its strong track record as one of the 75 Bursa companies on the FTSE4Good Bursa Malaysia Index, with the full rating of 4/4. New TM Transformation – Setting A New Trajectory Building on current momentum, TM has embarked on the next exciting phase of its journey with the ‘New TM’ Transformation Programme (2021-2023). Guided by the ‘New TM’ Compass of Purpose, Customers, Performance and People; TM will inculcate a new performance culture that is focused on outcome and impact. Over the next 12 months, TM looks to improve EBIT growth through three (3) areas of excellence: in connectivity, solutions and customer experience; with stronger revenue from our business units, better cost management and productivity from operations optimisation, and improved customer experience. The ‘New TM’ transformation is anchored on 40+ Value Programs, driven by a dedicated Transformation Office; with a new cadence towards a higher execution tempo, which is already showing early traction. TM is also reshaping its workforce into a stronger execution engine, embracing a more agile work culture with future-ready skills. For 2021, TM is sharing the following market guidance: Revenue growth to be flat or single digit growth, EBIT to be more than RM1.6 billion and CAPEX guidance to be between 14% to 18% of revenue. These will set TM on a sustainable growth trajectory, to create shareholder value and continuously enable a more Digital Malaysia. TM reiterates its support for MyDIGITAL – Malaysia Digital Economy blueprint and other Government’s digital and stimulus plans, towards accelerating the socioeconomic recovery and growth at this most critical time. TM believes that such public and private collaboration will propel the country towards a full-fledged Digital Malaysia by 2030 – a more digital society, digital business and digital Government. Imri Mokhtar, Managing Director & Group Chief Executive Officer commented: "We are pleased to report a resilient overall business performance in 2020 as we navigated through the challenges of the pandemic and macroeconomic environment. These uncertainties have required us to change the way we work, becoming more efficient in execution and being more prudent in managing resources. We are excited for the next phase of our journey with the ‘New TM’ Transformation Programme (2021-2023) - guided by our compass of Purpose, Customers, Performance and People. Our performance momentum has further strengthened our conviction in the transformation ahead. TM Group will be at the forefront in this new economy towards improving the quality of life of our customers and supporting nation-building programmes including MyDIGITAL and other stimulus plans. We remain confident to bring value for our customers and shareholders in 2021 and beyond.”
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