1Q 2010 RESULTS - Telekom Malaysia · RM3.424 in 4Q09 Profit Before Tax 352.6 91.3 +286.2 253.6...
Transcript of 1Q 2010 RESULTS - Telekom Malaysia · RM3.424 in 4Q09 Profit Before Tax 352.6 91.3 +286.2 253.6...
1Q 2010 RESULTS
27 May 2010
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Disclaimer
2
Performance Overview
Financial review
Operating highlights
Concluding remarks
3
4
Highlights 1Q 2010
Revenue performance stabilized and strong growth momentum in strategic segments
- Broadband & Data Growth
- Consumer & Government
Growing EBITDA margin QoQ but lower YoY due to UniFi,
ESOS and specific direct cost
UniFi successfully launched with positive customer feedback and more than 2,000 customers
Continued focus on shareholder returns and capital management, dividend policy commitment and strong cash position (RM3.9bn)
Operating revenue of RM2,125m, up 0.9% YoY
Normalised EBITDA of RM732m, stable QoQ but lower 10.2% YoY due to UniFi (HSBB) and specific direct cost items. Normalised EBITDA margin of 33.9%1
BAU capex of RM124m (5.8% of operating revenue), lower 43.1% YoY due to enhanced capital efficiency; HSBB capex of RM152m
High growth of internet and data revenues (up 9.8% and 8.4% YoY respectively), making non-voice now the major revenue contributor to TM
+11.4% yoy growth in broadband customers, 54k net adds in 1Q10
Voice revenue has slowed down 8.3% YoY as compared to 12.9% in the preceding quarter YoY
EBITDA margin calculated based on Normalized EBITDA and Operating revenues plus other operating Income of RM30.9m in 1Q20101
5
Financial Performance
Key Operating Indicators
Financial Highlights
Successfully launched UniFi in March
First triple play offering in the country
Take-up as planned with over 2,000 customers
Customer satisfaction of 84% since launch
Transformational for TM and nation building
6
Successful Launch of UniFi
2007 2008
Capital Expenditure, excluding HSBB1
Cash Balance
Total Debt
RM bnOur capital management approach is guided by two major principles :
• Striving to optimize capital productivity and ROIC
• Creating shareholder value
1.8 1.4 1.2
1 BAU Capex only (excludes HSBB Capex)2 Credit ratings by Standard & Poors (S&P) and Rating Agency Malaysia (RAM)
Active Capital Management Approach
6.87.0
6.7
2.2 2.13.5
21.2 16.7 14.1
Capex / Revenue ratio( %)
2009 1Q10
0.1
5.8
6.5
Credit Rating2 A-/AAA A-/AAA A-/AAA A-/AAA
3.9
7
Performance Overview
Financial review
Operating highlights
Concluding remarks
8
RMmn
Reported
Comments
1Q10 1Q09 Growth YoY 4Q09 Growth QoQ
Revenue 2,124.9 2,105.4 +0.9 2,272.6 -6.5Decline QoQ mainly from lower bandwidth sales and absence of MERS999 revenue
Other Operating Income 30.9 28.2 +9.6 55.5 -44.3 -
EBITDA 715.3 816.2 -12.4 757.7 -5.6Lower YoY due to higher A&P,manpower and supplies & material
EBITDA margin 33.2% 38.3% -5.1pp 32.5% +0.7ppMargin lower YoY due to higher operating cost & UniFi related cost
Depreciation 456.8 519.7 -12.1 494.9 -7.7Lower QoQ & YoY due to revision of useful life of assets
Net Finance Cost 72.3 30.2 +139.4 56.5 +28.0Higher cost YoY due to absence of interest income from Axiata
FX (Gain) / Loss 166.6 (175.5) +194.9 (47.3) +452.2Ringgit strenghten to RM3.261 from RM3.424 in 4Q09
Profit Before Tax 352.6 91.3 +286.2 253.6 +39.0 -
PATAMI 242.9 27.7 +776.9 170.2 +42.7 -
Note: EBITDA Margin is calculated as percentage of EBITDA against Total Revenue + Other Operating Income
9
Group Results 1Q10
1Q 2009 4Q 2009 1Q 2010 Comments (YoY)
Operating Revenue (RM mil) 2,105.4 2,272.5 2,124.9
Other Operating Income (RM mil) 28.2 55.5 30.9
Direct Costs % 19.6 19.9 21.7 • Higher international o/payment
RM mil. 412.9 451.2 461.2 • Content cost related to UniFi
Manpower % 18.8 17.0 19.3• Annual increment • Higher headcounts related to HSBB
RM mil. 396.3 387.3 410.6 • ESOS cost on Axiata options
Supplies & Materials % 3.6 6.8 5.2 • Higher cable cost due to higher copper prices, equipment & parts purchasedRM mil. 77.0 153.7 111.2
Bad & Doubtful Debts % 1.8 0.5 1.6 -
RM mil. 38.9 10.9 35.1 -
Marketing Expenses % 3.2 6.2 4.1• Higher A&P for product promotions & UniFi related activitiesRM mil. 66.5 140.4 87.7
Other Operating Costs % 15.6 18.8 15.5 -
RM mil. 327.8 426.9 329.8 -
Depreciation & Amortisation % 24.7 21.8 21.5 • Lower capex spend•Lower due to revision of assets’ useful life RM mil. 519.7 494.9 456.8
Total (RM mil) 1,839.2 2,065.4 1,892.6
Total (% of Operating Revenue) 87.4 90.9 89.1
Other (Loss) / Gain (net) 2.1 - (4.7)
Cost % of Revenue
10
Increase in cost YoY driven by planned UniFi related expenses and other specific direct cost
In RM mn 1Q09 2Q09 3Q09 4Q09 1Q10
Reported EBITDA 816.2 824.1 705.0 757.7 715.3
Non Operational
ESOS Cost 4.5 7.4 9.3 (9.9) 11.7
(Appreciation)/ Diminution in value of quoted shares
(6.2) (20.4) (9.8) (19.7) 4.7
(Gain)/ Loss on sale of Assets - (51.4) - 3.6 -
Normalised EBITDA 814.5 759.7 704.5 731.7 731.7
Normalised EBITDA Margin 38.2% 34.6% 33.2% 32.7% 33.9%
Reported EBITDA Margin 38.3% 37.5% 33.2% 32.5% 33.2%
Normalised EBITDA
11
Normalised EBITDA margin up 1.2pp QoQ
12
BAU Capex / Revenue ( %)
Group Capital Expenditure
BAU Capex HSBB Capex*
RM mn
4Q08 FY09 1Q10 Total
516
1,338152 2,006
Total HSBB Capex* Spent to Date
Note : BAU – Business As Usual Note : HSBB – High Speed Broadband* Gross amount which is shared with Government
Capex guidance remains.Spending to increase in the following quarters
109168
55
153
68
155
38
13140
86
31
49
0
100
200
300
400
1Q09 4Q09 1Q10 Budget 1Q10
Access Core Network Support System
RM mn
10.3 18.0 5.8
218
409
124
333
15.3
28
15464
287
59
268
25
244
15
123
63
165
0
200
400
600
800
1Q09 4Q09 1Q10 Budget 1Q10
Access Core Network Support System
RM mn
152
545
102
696
7,568.4
150.5
8,526.8
5,664.6
1,666.4
1,180.3
15.5
16,245.7
6,804.1
1,896.7
491.8
3,895.6
520.0
4,363.0
2,883.2
883.4
596.4
2,441.1
12,215.4
1,589.2
16,245.7
6,987.5
142.5
8,371.5
5,796.9
1,588.7
985.9
-
15,501.5
6,180.0
1,781.0
503.0
3,490.7
405.3
4,441.0
2,934.6
916.6
589.8
1,739.0
12,329.9
1,432.6
15,501.5
Shareholders’ Funds
Minority Interests
Deferred & Long Term Liabilities
Long Term Borrowings
Deferred Tax
Deferred Income
Derivative financial liabilities
Current Assets
Trade Receivables
Other Receivables
Cash & Bank Balances
Others
Current Liabilities
Trade and other Payables
Short Term Borrowings
Others
Net Current Assets
Property Plant & Equipment
Other Non-current Assets
RM MillionAs at 31 March 2010 As at 31 Dec 2009
13
1
31 March 2010 31 Dec 09 31 March 10 31 Dec 09Return on Invested Capital 6.60% 6.74% Debt to EBITDA 2.29 2.16
Return on Equity 5.09% 6.70% Gross Debt/ Equity 0.86 0.96
Return on Assets 5.09% 3.70% Net Debt/ Equity 0.35 0.46
Current Ratio 1.56% 1.39% Net Assets/Share (sen) 213.3 197.2
1
31 Mar 10
1 Based on Normalised PATAMI
31 Mar 10
Group Balance Sheet & Key Financial Ratios
31 Dec 09 31 Dec 09
Note : USD 260; USD 465mn; USD 300m; Fx Rate 3.26151 2 3
USD denominated
RM denominated
2010 2013 2014 2018 2025
RM mn
1
2
3
849
2,000
1,535
925 976
Debt Maturity Profile
Continue to optimize through active capital management
Performance Overview
Financial review
Operating highlights
Concluding remarks
14
Total Revenue by Line of Business
15
Global Others
1Q10
FY09
Wholesale
RM mn
1Q09
201
4Q09
193
1Q10
190
-1.6%
-5.5%
RM mn
1Q09
67
4Q09
65
1Q10
68
+4.6%
+1.5%
RM mn
1Q09
216
4Q09
274
1Q10
202
-26.3%
-6.5%
Retail
RM mn
1Q09
1,621
4Q09
1,741
1Q10
1,665*
1
1
-4.4%
+2.7%
Retail78%
Global10%
Wholesale9%
Others3%
Retail78%
Global10%
Wholesale9%
Others3%
Wholesale & Global revenue declined due to lower contribution from VoIP & Data
1
2
2
22
Note: Total revenue & breakdown is after inter-co eliminationinclude MERS 999 revenueadjusted since last reporting due to customer classification2
1
829 822 791 770 768
189 172 194 180 208
385 398 415399 420
243 254 247450 333
0
500
1000
1500
2000
1Q09 2Q09 3Q09 4Q09 1Q10
Voice Data Internet Others
Total Revenue By Products
RM mn
1,6401,638
Note : Breakdown is before inter co elimination
1Q10
1,641
1,741
Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co elimination
RETAIL
1,665
Revenue by Product Revenue by Business Unit
FY09
16
Consumer33%
SME25%
Enterprise24%
Government18%
Consumer34%
SME25%
Enterprise24%
Government17%
Growth in Internet & Data and stabilization of Voice QoQ
Total Revenue by Product
17
1Q09
Voice
RM mn
1,034
4Q09
964
1Q10
948
1Q09
Others
RM mn
4Q09 1Q10
319
480357
*
1
1Q10
FY09Data
RM mn
1Q09 4Q09 1Q10
367
427 398
-6.8%
+8.4%
-25.6%
+11.9%
1Q09
Internet
RM mn
4Q09 1Q10
385402
423
+5.1%
+9.8%-1.6%
-8.3%
Voice44%
Data19%
Internet20%
Others17%
Non-Voice contribution increased due to higher internet subscribers & demand for bandwidth
Voice46%
Data18%
Internet19%
Others17%
Note: Total revenue & breakdown is after inter-co eliminationinclude MERS 999 revenue1
1
1,133 1,165 1,135 1,163 1,212
200 206 263 268 273
0
500
1,000
1,500
2,000
1Q 09 2Q 09 3Q09 4Q09 1Q10
Residential Business
In thousand
1,333 1,370 1,398 1,431
18
In thousand +0.6%
4,290 4,320
+11.4%
4,331
-0.1%
4,321
1,485
+3.8%
4,316
Physical Highlights
Broadband Customers Growth
Fixed Customers Growth
WiFi Hotspot Zones
2,784 2,792 2,797 2,767 2,763
1,506 1,528 1,534 1,554 1,553
0
1,000
2,000
3,000
4,000
5,000
1Q09 2Q09 3Q09 4Q09 1Q10
Residential Business
Attractive bundle packages & pricing improved Net Adds
ARPU (RM) 1Q09 2Q09 3Q09 4Q09 1Q10
Business* 74 78 73 67 64
Residential* 21 21 20 19 20
Streamyx Broadband** 87 86 89 86 86
771 796 8251,345 1499
499 507 525
724746
1Q09 2Q09 3Q09 4Q09 1Q10
Other States Klang Valley
1,270 1,303 1,350
2,0692,245
+76.8%
+8.5%
*Call Usage Only** Streamyx Gross ARPU only
+54
Net adds (in thousand)
+33+28+37
Performance Overview
Financial review
Operating highlights
Concluding remarks
19
20
Key Takeaways
Capital Management
Broadband
UniFiSuccessfully launched the FIRST triple play offering,
which now has more than 2k customers taking up the packages
Stronger sales momentum with 54k net adds
Active capital management approach including prudent capex spend, healthy cash level of RM3.9bn and a
committed dividend policy
Customer CentricityCommitted to spend at least 5% of revenue for
improvement in quality of customers’ experience
Appendix
7794 83 73 69
123
139
107 129 134
12
22
1419 16
0
50
100
150
200
250
300
1Q09 2Q09 3Q09 4Q09 1Q10
Voice Data Others
Total Revenue By Products
RM mn
228
189
1Q10
176
193
Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co eliminationOthers : Include Internet
WHOLESALE
FY09
190
Revenue by Product Revenue by Customer Segment
ASP17%
MC83%
ASP19%
MC81%
MC : Malaysia Carrier (new name for Domestic Career) ASP : Application Service Provider
22
12991
127 122 113
96
108
97
161
100
5
70
5
5
0
100
200
300
400
1Q09 2Q09 3Q09 4Q09 1Q10
Voice Data Others
Total Revenue By Products
RM mn
185
212 214
274
GLOBAL
Revenue by Product Revenue by Region
202
FY09
Africa & Middle
East8%
America14%
Europe7%
South Asia42%
North Asia12%
Oceania6%
Others11%
Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co eliminationOthers : include Internet
1Q10
Africa & Middle
East9%
America6%
Europe12%
South Asia42%
North Asia12%
Oceania7%
Others12%
23
In RM mn 1Q09 2Q09 3Q09 4Q09 1Q10
Reported PATAMI 27.7 266.0 179.1 170.2 242.9
Non Operational
ESOS Cost 4.5 7.4 9.3 (9.9) 11.7
(Appreciation)/ Diminution in value of quoted shares
(6.2) (20.4) (9.8) (19.7) 4.7
(Gain)/ Loss on sale of Assets - (51.4) - 3.6 -
Unrealised Forex (Gain)/ Loss on long term loans
175.5 (123.2) (45.5) (47.3) (166.6)
Net (Gain) / Loss on Debt management (32.6) (13.7)
Reversal of Excess Current / Deferred Tax Provision
(1.6) 0.6 (8.5) 14.4 -
Normalised PATAMI 199.9 79.0 92.0 97.6 92.7
Normalised PATAMI
24
TM – Latest Promotions
25
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•Investor Relations• Level 11 (North Wing)• Menara TM •Jln Pantai Bharu •50672 Kuala Lumpur, Malaysia • Tel (603) 2240 4848/ 7366 / 7388