KUALA LUMPUR: Telekom Malaysia Bhd posted a net loss of RM175.59 million in the third quarter (Q3) ended September 30, 2018 versus a net profit of RM211.82 million a year ago due to impairment loss on wireless and fixed network assets.
The telecommunication company, in a filing to Bursa Malaysia today, said without the reported impairment and other non-operational items, its normalised earnings before interest and tax (EBIT) stood at RM315.6 million, up 39.4 per cent from normalised EBIT of RM226.4 million in Q2.
TM said it had seen steady operational performance, amid heightened challenges in its operating environment, namely industry and market challenges impacting its revenue.
The group’s revenue held steady at RM2.95 billion, 0.2 per cent higher from RM2.94 billion recorded in the same quarter last year, on the back of higher data as well as other telecommunication related services revenue.
Its total capital expenditure (capex) investment for the first nine months was RM1.32 billion, or 15.1 per cent of revenue.
“This is within TM’s full year capex guidance of 19 to 20 per cent of revenue. By asset type, access comprised 62 per cent of total spending, followed by core network at 15 per cent and the remaining 23 per cent was for support systems,” it said.
TM acting group chief executive officer Imri Mokhtar said it continued to face various headwinds from competitive market dynamics.
“However, in light of the continued pressure from industry and market challenges and its impact on our revenue thus far, we have taken a prudent view, by undertaking the impairment of our network assets – this resulted in close to a RM1 billion impairment loss this quarter.
“The operational improvement in Q3 2018 is testament to the group’s commitment to the four pillars of our Performance Improvement Programme (PIP 2018) - Revenue Uplift / Preservation, Sustained Profitability, Improved Cash Flow and Increased Productivity that will navigate us through these headwinds.
“We are rationalising our business, reducing operating costs and focusing our resources on the opportunities that will have the most impact,” he said.
Meanwhile, TM announced a revised dividend policy which states that the company intends to distribute yearly dividends of 40 to 60 per cent from its net profit.
“Dividends will be paid depending on overall business and earnings performance, capital commitments, financial conditions, distributable reserves and other relevant factors. The dividend policy will take effect from the next dividend declaration,” it said.
Imri said in light of the current operating landscape and after careful consideration of the potential impact on earnings alongside its efforts to transform the company to adapt thereto, the board had determined the review of the dividend policy to support TM’s long-term strategic objectives.
TM said the recent industry challenges and market environment had had major impact to the overall revenue estimates and earnings in the financial year.
“TM anticipates that the challenging environment will persist for both its retail and wholesale segments. In the midst of these challenges, TM will continue to focus towards strengthening performance of its core business and operations,” it said.