Telekom Malaysia today announced its financial results for the second quarter of 2011 ended 30 June 2011.
Key take-away:
- Streamyx: 1.721 million customers as of Q2, 2011
- UniFi- As of 18 August 2011, more than 142,000 customers, 973,000 premises passed covering 76 exchange areas | Targeting 78 exchange areas by end 2011 for a total of 1.1 million premises passed
- Hotspots & Streamyx Zones: 16,111 sites nationwide as of Q2, 2011 | Target to hit to reach 28,000 locations by year end
Full details below.
Kuala Lumpur,24 August 2011-Telekom Malaysia Berhad (TM) today announced its financial results for the second quarter of 2011 ended 30 June 2011.
TM reported positive improvements all-round in its business and showed solid progress in transforming itself into becoming Malaysia’s Information Exchange.
The Group posted revenue of RM2,233.6 million for the second quarter of 2011 ended 30 June 2011, up by 3.8%, compared to RM2,150.9 million in the 2Q2010, mainly attributed to higher revenue from Internet and multimedia, data services and other telecommunications related services.
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for 2Q2011 was higher at RM746.9 million, up 8.8% from RM686.2 million recorded in 2Q2010. Normalised EBITDA improved 10.4% to RM768.0 million from RM695.5 million in 2Q2010. Normalised EBITDA margin improved by 2.0pp at 33.9%, as compared to 31.9% in 2Q2010.
Group Profit After Tax And Minority Interest (PATAMI) rose 2.3% to RM127.2 million in 2Q2011 from RM124.4 million in the corresponding period last year. This was mainly attributed to higher revenue, and lower net finance cost. Normalised PATAMI improved 20.8% from RM111.9 million in 2Q2010 to RM135.2 million this quarter.
Data revenue increased by 7.1% this quarter to RM455.0 million compared to RM424.9 million in the same quarter 2010 arising from demand for higher bandwidth services. Internet and multimedia registered higher revenue by 21.1% to RM487.9 million in the current year quarter arising from increased broadband and UniFi customers to 1.721 million and 109,019 respectively in the current quarter from 1.541 million and 4,051 in the corresponding quarter 2010.
Speaking at the press conference after announcing the Company’s 2011 second quarter financial results, Dato’ Sri Zamzamzairani Mohd Isa, Group Chief Executive Officer, TM said, “I’m pleased with this commendable half-year results delivered by the TM team which has shown across the board continued positive operational improvements. This demonstrates TM’s ability to leverage on its inherent strengths and scale opportunities present in this competitive environment. It is certainly not easy to simultaneously transform and modernise your network, overhaul your processes, implement cost initiatives, weather severe competition and tightening revenues, while maintaining our leadership position as Malaysia’s broadband champion.”
In commenting on operational performance, Dato’ Sri Zam said, “TM remains Malaysia’s broadband champion as seen by the continued increase in customer base for both our Streamyx and UniFi products. We continued to record growth in the broadband segment, with Streamyx customers up by 11.7% YoY, from 1.541 million customers in the 2nd quarter of 2010, to 1.721 million customers due to optimized product portfolio and improved go-to-market strategy. Strong demand for UniFi has exceeded expectations and the momentum we saw at the beginning of the year continued into the 2nd quarter with our subscriber base almost doubling, from 63,541 in 1Q2011 to 109,019 in 2Q2011 on the back of 904,000 premises passed covering 68 exchange areas. As of 18 August 2011, we have installed UniFi to more than 142,000 customers on the back of more than 973,000 premises passed covering 76 exchange areas, with 46 IPTV channels. This shows a ramping up of take up rate from 12%, as at 30 June 2011 to 14% to date which exceeds our initial expectation of 8-10% take up rate for the first two years.”
TM is on track to increase the UniFi service coverage to a total of 78 exchange areas covering 1.1 million premises passed by end of 2011 and 1.3 million premises passed by the end of 2012, which is the target set under the PPP Agreement with the Government. On 3 June 2011, TM announced the execution of the HSBB Services Agreement with Celcom Axiata Berhad (Celcom), where it will provide wholesale HSBB (Access) services to Celcom for a 3-year period. UniFi coverage was also expanded beyond the Klang Valley area, with the latest launch in Melaka last month. TM’s Hotspots & Streamyx Zones nationwide also grew from 2,533 sites in June 2010 to 16,111 sites, a 5-fold year on year increase, in line with its plan to meet the needs of nomadic customers as well as add value to the current offering for TM fixed line customers. By year end, coverage is expected to reach 28,000 locations.
TM remains committed to grow its enterprise value through improving return on capital, maintaining a stable profitability margin and a positive dividend yield. As at 30 June 2011, TM’s Total Shareholder Returns (TRS) continues to be above industry peer average at 24.7% – the best performing Telco. In line with its continued focus in creating shareholder value and dividend policy, TM is pleased to announce that its Board of Directors has approved a single-tier interim dividend payout of 9.8 sen per share or approximately RM350.6 million to be paid to shareholders in September 2011, in line with its full year dividend commitment.
Dato’ Sri Zam went on to comment, “While we compete to offer the best value to our shareholders and customers, we continue to be prudent in our spending by maintaining tight focus on our capital management approach by striving to optimize our capital productivity. This strong focus on cost optimisation and capex efficiency is reflected in the lower Business as Usual (BAU) capex in 1H2011. TM spent RM307 million during this period, 8.6% lower as compared to RM336 million in the same period last year. This was the result of tighter procurement approach and requirement scrutiny as well as optimising our network architecture. For the first half, our Capex spend was in line with our planned HSBB rollout and the New Generation Network (NGN) migration plan which focused on access and core network. We achieved a commendable improvement in our capital management where we recorded a capex/revenue 17.1% in 1H2011, as compared to 18.8% in the same period last year. We will continue to ensure cost efficiencies for the Group while ensuring the quality of our services and our customers’ experience with TM remains high.”
CONTINUED POSITIVE OPERATIONAL PERFORMANCE
Comparison: Year-to-Date (1H2011 vs 1H2010 Results)
For the first-half year ended 30 June 2011, the Group revenue increased by2.5% to RM4,381.8 million as compared to RM4,275.8 million in 1H2010 on the back of continued growth in demand for Internet and data services, which grew by 16.9% and 6.9% respectively. Data revenue grew by 6.9% to RM879.6 million compared to RM822.6 million last year contributed mainly by higher revenue in IPVPN services. Internet revenue for the half year increased by 16.9% from RM805.1 million recorded in 1H2010 to RM941.3 million attributed to positive growth in broadband customers.
EBITDA increased 5.1% to RM1,477.8 million from RM1,406.2 million in 1H2010 due to higher operating revenue. Normalised EBITDA was up 5.3% to RM1,497.0 million. Normalised EBITDA margin improved by 0.9pp at 33.7%, as compared to 32.8% in 1H2010, due to increased operating revenue.
Normalised PATAMI, excluding mainly the foreign exchange gain improved 29.4% from RM199.0 million in 1H2010 to RM257.5 million this year.
MOVING FORWARD
TM remains steadfast in maintaining its position as Malaysia’s Broadband Champion anchoring on Streamyx and UniFi as its key broadband products, delivering an enhanced and integrated digital lifestyle to all Malaysians where everyone can leverage on its platform to connect, communicate and collaborate effectively; whilst focusing on its transformation journey to be a New Generation Telco and an Information Exchange. TM is also committed to pursuing its quality improvement program in its effort to deliver an enhanced customer experience.
Having a proven track record as the Government’s preferred partner in delivering communications services coupled with its extensive network coverage and collective expertise, TM is well positioned to support the Government’s agenda in fulfilling the aspiration of the Economic Transformation Programme (ETP) to transform the nation via our involvement in the Entry Point Project (EPP) especially in the key areas of “Business Services” and “Communications, Content and Infrastructure” (CCI).
Against this backdrop of industry liberalisation, regulatory changes and intensely competitive telecommunication landscape, the Board of Directors expects TM’s business environment for the financial year ending 31 December 2011 to remain challenging.
