TM net profit surges in Q1

TELEKOM Malaysia Bhd's (TM) (4863) first quarter net profit for the period ended March 31 2010 jumped to RM242.9 million from only RM27.7 million a year ago, backed by strong growth from Internet, data and other related telecommunication services.

Revenue for the quarter rose by 0.9 per cent to RM2.12 billion from RM2.11 billion in the same quarter in 2009.

In a statement, the telecommunication company said Internet revenue grew by 9.8 per cent to turn in RM422.6 million from RM385 million previously.

Data and leased services revenue increased by 8.4 per cent to RM397.7 million from RM366.9 million a year before.

Other telecom services grew by 16.1 per cent to RM296.7 million from RM255.5 million.

The strong growth in these non voice revenue streams was partially offset by lower voice revenue and international inpayment.

TM group chief executive officer Datuk Zamzamzairani Isa said Internet continues to be a strong revenue-driver for the company.

As at end-March 2010, its customer base stood at 1.48 million.

The strong growth for the first quarter period was also boosted by favourable foreign exchange currency translation.

TM recorded an unrealised exchange gain on translation of foreign currency borrowings of RM166.6 million as compared to a loss of RM175.5 million in the period of 2009.

Zamzamzairani said TM has been aggressively introducing new and innovative products over the last six months, to cater for the ever changing demand pattern as well as competition from other players in the broadband space.

The notable ones are Super Upgrade Deals and the Blockbuster Deals.

The Super Upgrade Deals has so far registered about 55,000 existing broadband customers moving into higher Internet speed packages while the Blockbuster Deals has 24,000 new customers.

TM, however, registered a lower earnings before interest, tax, depreciation and amortisation (Ebitda) in the first three months of 2010 of RM715.3 million as compared to RM816.2 million previously.

This was due to, among others, higher advertising and promotion expenses for product promotion and UniFi related activities, higher international outpayment due to increase in traffic minutes, higher supplies and materials cost, as well as higher customer premises equipment and parts cost in line with increased Internet installations.

Zamzamzairani said Ebitda margin of 33.2 per cent for the first quarter of 2010, however, remains in line with key performance indicator of 33 per cent set for this year.

Moving forward, he said TM was set to benefit from the economic recovery, especially in the broadband space.

"Penetration rate in the broadband market is still low at 34.2 per cent of households as of end-March 2010," he said, adding this gives TM the opportunity to further enhance its leading role in the industry.