TM sees 26% increase in 3Q net profit as more Malaysians work from home

TM sees 26% increase in 3Q net profit as more Malaysians work from home
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KUALA LUMPUR (Nov 25): Telekom Malaysia Bhd (TM) reported a 26% increase in net profit to RM329.4 million for the third financial quarter ended Sept 30, 2020 (3QFY20), from RM261.3 million a year earlier, partly due to a shift towards working from home amid the Covid-19 pandemic.

Revenue for the quarter fell 5.7% to RM2.69 billion from RM2.85 billion for the previous year’s corresponding quarter.

On a quarter-on-quarter basis, its net profit increased 20% from RM274.7 million, while revenue grew 3.8% from RM2.59 billion.

The sequential increase in revenue was attributed to higher revenue from voice, Internet and data services. Lower operating cost, as a result of cost optimisation programmes, contributed to the increase in net profit.

During the quarter, TM said, it invested 15% of its revenue in capital expenditure (capex), amounting to RM400 million, on network optimisation. It said 50% of the amount was invested in network access, 17% for its core network and the balance 33% on its support system.

For the cumulative first nine months ended Sept 30, 2020 (9MFY20), its net profit stood at RM756.67 million, 11% higher year-on-year from RM683.77 million previously, while cumulative revenue was down 6.7% at RM7.84 billion versus RM8.4 billion a year ago.

“We are pleased to report another quarter of growth across all key financial metrics — revenue and profit — despite the challenging environment in the third quarter. Our efforts in cost optimisation continued to yield results with a healthy pre-tax profit and a strong net profit. 

“As we enter the ninth month of the Covid-19 pandemic, our priority continues to be the safety and health of our 'Warga TM', while continuously delivering connectivity and solution excellence to our broad customer base,” said TM group chief executive officer (CEO) Imri Mokhtar in a statement.

He said unifi was seen to gain momentum, with a 6.3% increase in subscribers to 1.65 million, while its total broadband customer base stood at 2.26 million.

The group also saw the highest convergence penetration of three services or more in TM households since 2018, at 58%, as more Malaysians worked from home.

Meanwhile, the group saw scaling up of the Cloud Alpha suite of services under its TM ONE segment, while its TM Wholesale segment bagged a new contract with a domestic mobile player for cross-ocean connectivity, backhaul connectivity solutions and broadband access capacity upgrades.

The group said its network remained stable throughout the conditional movement control order (CMCO) period due to network optimisation despite traffic utilisation surging between 30% and 50% in March to November this year.

Looking ahead, TM noted the uncertainty amid the recent wave of Covid-19 from October onwards but said it will continue to play its part as an essential service provider, ensuring a stable network performance on both its retail and wholesale fronts.

It will leverage the government’s introduction of Jendela, an initiative to increase connectivity, as well as the RM7.4 billion allocation in Budget 2021 to deliver upgraded broadband services in 2021 and 2022.

TM rose 15 sen or 3.3% to RM4.75 before the noon market break today, giving it a market capitalisation of RM17.92 billion.

Surin Murugiah