Tmq209 present

TELEKOM MALAYSIA BERHAD

1H 2009 RESULTS

21 August 2009

(TM Group – continuing operations only)*

* Results of TM Group post demerger

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This presentation is not and does not constitute an offer, invitation, solicitation or recommendation to subscribe for, or purchase, any securities

and neither this presentation nor anything contained in it shall form the basis of, or be relied on in connection with any contract or commitment or

investment decision.

This presentation has been prepared solely for use at this presentation. By your continued attendance at this presentation, you are deemed to

have agreed and confirmed to Telekom Malaysia Berhad (the “Company”) that: (a) you agree not to trade in any securities of the Company or its

respective affiliates until the public disclosure of the information contained herein; and (b) you agree to maintain absolute confidentiality

regarding the information disclosed in this presentation until the public disclosure of such information, or unless you have been otherwise

notified by the Company.

Reliance should not be placed on the information or opinions contained in this presentation or on its completeness. This presentation does not

take into consideration the investment objectives, financial situation or particular needs of any particular investor.

No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information,

opinions and conclusions contained in this presentation. None of the Company and its affiliates and related bodies corporate, and their

respective officers, directors, employees and agents disclaim any liability (including, without limitation, any liability arising from fault or

negligence) for any loss arising from any use of this presentation or its contents or otherwise arising in connection with it.

This presentation contains projections and “forward-looking statements” relating to the Company’s business and the sectors in which the

Company operates. These forward-looking statements include statements relating to the Company’s performance. These statements reflect the

current views of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions. It is important to note

that actual results could differ materially from those anticipated in these forward looking statements. The Company does not undertake to inform

you of any matters or information which may come to light or be brought to the Company’s attention after the date hereof.

The forecasts and other forward-looking statements set out in this presentation are based on a number of estimates and assumptions that are

subject to business, economic and competitive uncertainties and contingencies, with respect to future business decisions, which are subject to

change and in many cases outside the control of the Company. The directors and officers of the Company believe that they have prepared the

forecasts with due care and attention and consider all best estimates and assumptions when taken as a whole to be reasonable at the time of

preparing the presentation. However, the Company’s forecasts presented in this presentation may vary from actual financial results, and these

variations may be material and, accordingly, neither the Company nor its directors or officers can give any assurance that the forecast

performance in the forecasts or any forward-looking statement contained in this presentation will be achieved. Details of the forecasts and the

assumptions on which they are based are set out in the presentation.

This presentation may not be copied or otherwise reproduced without the written consent of the Company.

Disclaimer

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17.2%8.6%

13.3% 19.6%

Voice Data Internet Others

REVENUE

Capex

1H08 1H09

4,234

+2.9%

HSBB (Gross)

BAU (Business As Usual)

428

1H08 1H09

EBITDA PATAMI

1H08

+17.3%

1,398

1H09

1,640

+1.1%

2,105 2,129

1Q09 2Q09

+0.9%

2,109 2,129

2Q08 2Q09

QoQ

YoY

Broadband*

+18.4%

37.9

Ebitda Margin (%)

229294

1H08 1H09

+28.2%

1H08

1,157

1H09

1,370

* Exclude hotspots

Fixed Line

1H08

4,316

1H09

4,320

In thousand In thousand

714

4,115

33.0

Key 1H 2009 Highlights

RM mn

RM mn

+0.1%

RM mn

520

2,105 2,129

2,1292,109

Revenue up 2.9% in challenging market supported strongly by non-voice revenue growth

EBITDA margin better than full-year guidance of low to mid 30s due to lower operating cost

Streamyx customers grew to 1.370 million with fixed line recorded its first positive growth backed by higher demand from Business & Residential customers

Cost management remains as key initiative and evident through lower Capex spending for BAU but expect higher spending in 2H09 mainly for HSBB

-27.2%

TM Group – continuing operations only

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RM mn 2Q09 1Q09Growth

Q on Q2Q08

Growth

Y on Y1H09 1H08

Growth

YTD on YTD

Revenue 2,127.9 2,105.4 +1.1% 2,109.2 +0.9% 4,233.4 4,115.1 +2.9%

EBITDA 824.1 816.2 +1.0% 787.0 +4.7% 1,640.3 1,398.5 +17.3%

EBITDA margin 35.8% 38.3% -2.5pp 36.0% -0.2pp 37.0% 33.0% +4.0

Profit Before Tax 358.9 91.3 +293.1% 128.8 +178.6% 450.2 238.1 +89.1%

Depreciation 531.2 519.7 +2.2% 540.9 -1.8% 1,050.9 1,035.8 +1.5%

Net Finance Cost 57.4 30.2 90.1% 42.4 35.4% 87.6 168.5 -48.0%

PATAMI

Broadband Customers

(‘000)

1,370 1,333 +2.8% 1,157 +18.4%Fixed Line Customers

(‘000)

Reported

Key 1H 2009 Performance Highlights

1,370 1,157 +18.4%

+0.1%4,3164,320+0.1%4,316+0.7%4,2904,320

266.0 27.7 +860.3% 114.7 +131.9 293.7 229.1 +28.2%

528.5 517.1 +2.2% 534.8 -1.2% 1,045.6 1,025.9 +1.9%

37.5% 38.3% -0.8pp 36.0% +1.5pp 37.9% 33.0% +4.9pp

2,129.0 2,105.4 +1.1% 2,109.2 +0.9% 4,234.4 4,115.1 +2.9%Revenue

EBITDA

EBITDA margin

Profit Before Tax

Depreciation

Net Finance Cost

PATAMI

Broadband* Customers

(‘000)

Fixed Line Customers

(‘000)

FX ( Gain) Loss (123.2) 175.5 -170.2% 74.9 -264.5 52.3 (43.9) 219.1%

1,370 1,333 +2.8% 1,157 +18.4% 1,370 1,157 +18.4%

Higher 1H09 EBITDA margin on the back of higher revenue & lower cost


Note:

• EBITDA Margin is calculated as percentage of EBITDA against Total Revenue + Other Operating Income

* Exclude Hotspot Customers & Net of Churn

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PATAMI

In RM mn 1Q09 2Q09 2Q08 1H09 1H 08

Reported EBITDA 816.2 824.1 787.0 1,640.3 1,398.5

ESOS Cost 4.5 7.4 33.2 11.9 93.6

(Appreciation)/ Diminution in value of quoted shares

(6.2) (45.0) 10.3 (51.2) 58.0

USP prior year adjustment - - (35.2) - (35.2)

Provision for VOIP Doubtful Debts - - - - 112.9

(Gain) / Loss on sale of Assets - (26.8) (14.1) (26.8) (25.7)

Normalised EBITDA 814.5 759.7 781.2 1,574.2 1,602.1

Normalised EBITDA Margin 38.2% 34.6% 35.8% 36.4% 37.8%

Reported EBITDA Margin 38.3% 37.5% 36.0% 37.9% 33.0%

Normalised EBITDA


In RM mn 1Q 09 2Q 09 2Q 08 1H 09 1H 08

Reported PATAMI 27.7 266.0 114.7 293.7 229.1

ESOS Cost 4.5 7.4 33.1 11.9 93.3

(Appreciation)/ Diminution in value of quoted shares

(6.2) (45.0) 10.3 (51.2) 58.0

USP prior year adjustment - - (26.0) - (26.0)

Provision for VOIP Doubtful Debts - - - - 83.6

(Gain) / Loss on sale of Assets - (26.8) (14.1) (26.8) (25.7)

Unrealised Forex Loss / (Gain) on Long Term Loans

175.5 (123.2) 74.9 52.3 (43.9)

Loss termination of Ranged Accrual / Long Dated Swap

- - 15.9 - 82.0

Reversal of Excess Current / Deferred Tax (1.6) 0.6 (51.9) (1.0) (51.9)

Normalised PATAMI 199.9 79.0 156.8 278.9 398.5

Normalised PATAMI


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7Note: Total revenue is after inter-co elimination. Revenue of segment is before inter-co elimination

1H09

1H08RM mn

RM mn

2,109 2,105 2,129

4,2344,115

+0.9%

+1.1%

+2.9%

Total Revenue by Line Of Business

Note: Breakdown is before inter-co elimination

Retail remains key contributor for the Group with growthfrom Wholesale & Global


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8Note: Total revenue and revenue of segment are after inter-co elimination

1H09

RM mn

RM mn

2,109 2,105 2,129

4,2344,115

+0.9%

+1.1%

+2.9%

Total Revenue by Product

1H08

Efforts on Internet & Data continued to drive Non-Voicecontribution to total revenue


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PHYSICAL HIGHLIGHTS

Fixed Customers Growth

Broadband* Customers Growth

In thousand

In thousand

+0.1%

-0.2% -0.2%

ARPU (RM) 2Q 2008 3Q 2008 4Q 2008 1Q 2009 2Q 2009

Business* 85 79 77 74 78

Residential* 25 24 23 21 21

Streamyx Broadband ** 93 94 90 87 88

* Call usage only** Streamyx Gross ARPU only

4,316 4,308

-0.2%

* Exclude Hotspots

+0.7%

4,297 4,290 4,320

QoQ Business & Residential fixed customers recordedpositive growth

+0.3%

+1.5%


1,1571,229

1,280 1,3331,370

+18.4%

Total Revenue By Products

Revenue by ProductRevenue by Business Unit

RM mn

RM mn

+3.6%

+2.8%

+5.9%

1,7431,646

1,682

3,2963,389

1H09

Retail

44% 51%

53%50%

45%

56% 49%

55% 50% 47%

Note : Breakdown is before inter company elimination

Note: Based on after inter-co elimination

Revenue growth YoY despite challenging economy


10

+20.3%

212

255

+30.8%

+16.8%

400*

467

Revenue by Customer SegmentRevenue by Product

RM mn

RM mn

DC : Domestic CarrierASP : Application Service Provider

Wholesale

59%63%

41% 37%

58% 64%

63%

42%36% 37%

•Prior year comparative has been adjusted to be consistent with the business realignment in 2Q09 Others : Include internet

Overall growth driven by Data & Leased services


195*

11

230

206

+5.8%

412*436

Revenue by Region

1H09

1H08

Revenue by Product

RM mn

RM mn

Global

45%

55% 50%

50%

46%

54%

44%

56%

56%

44%

Focusing on higher Data revenue with higher margin & long term customer commitment while sustaining Voice business

•Prior year comparative has been adjusted to be consistent with the business realignment in 2Q09 Others : Include internet

231*


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-10.8%

-10.4%

Cost % Of Revenue

Total Cost / Revenue ( %)

94.1% 88.1%

Cost % of Revenue

87.1%

RM3,872.3 RM3,732.1 RM1,833.0

89.2%

RM1,899.1

RM mn

Cost for 1H09 continued to be managed effectively


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GROUP CAPITAL EXPENDITURE

714

948

1

1Others include building, land, moveable plants & other assets

520

RM mn

RM mn

BAU Capex / Revenue ( %)

17.4

+38.5%343 371

218

302

-18.6%

-36.4%

-27.2%

HSBB Capex

BAU Capex

RM mn

516

102

326

Capex efficiency resulted in lower BAU Capex. HSBB Capex building up momentum


12.3

17.1 17.6 10.3 14.2

HSBB Milestone

10,248.1

226.5

8,587.3

6,965.1

1,362.0

260.2

19,061.9

9,412.4

2,127.9

763.4

4,025.0

2,095.2

400.9

3,471.3

2,812.6

34.9

623.8

5,941.1

11,772.1

1,348.7

19,061.9

6,835.9

127.8

8,928.5

7,033.8

1,435.7

459.0

15,892.2

6,095.6

2,241.6

656.4

0

2,821.3

376.3

3,209.7

2,535.8

41.9

632.0

2,885.9

11,664.9

1,341.4

15,892.2

Shareholders’ Funds

Minority Interests

Deferred & Long Term Liabilities

Long Term Borrowings

Deferred Tax

Deferred Income

Current Assets

Trade Receivables

Other Receivables

Amount due from Axiata

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 30 June 2009 As at 31 Dec 2008

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1

30 June 09 31 Dec 08 30 June 09 31 Dec 08Return on Invested Capital 7.33% 4.50% Gross Debt/ Equity** 1.03 0.68

Return on Equity 6.53% 6.99% Gross Debt/ Equity*** 1.03 0.29

Return on Assets 5.67% 3.15% Net Debt/ Equity** 0.62 0.48

Current Ratio 1.90% 2.71 Net Debt/ Equity*** 0.62 0.09

Debt to EBITDA 2.15% 2.45 Net Assets/Share (sen) 193.4 296.5

1

Lower Shareholder Funds due to Capital Repayment of RM3.506bn

Deferred Income higher mainly due to HSBB of RM185mn

*Annualised ** Before Amount Due from Axiata ** *After Amount Due from Axiata

Note : USD 300m; USD 500m; USD 300m; Fx Rate 3.5151 2 3

USD denominated

RM denominated

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2

3

Group Balance Sheet & Key Financial Ratios

Cash & Bank Balances remain strong at RM2.821bn post final dividend 2008 & capital repayment

2010 2013 2014 2018 2025

31 Dec 0830 June 09*31 Dec 0830 June 09*

1 Based on Normalised PATAMI

Cash position remains strong post capital repayment


RM mn

• Effective BAU* Capex spending

• Lower operating cost contributed to encouraging 1H09 EBITDA margin

•Completed 1st tranche monetization of housing loans worth RM344mn

• Cash & Bank balances remain strong at RM2.8bn

• Interim tax exempt Dividend of 10sen or approximately RM358mn to be paid to shareholders by end of Sept 09

• On track towards our Dividend Policy commitment of RM700mn or 90% Normalised PATAMI whichever is higher

Balance Sheet Management

Cost Management

Interim Dividend

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• Double digit growth recorded for all Non-Voice businesses

• Positive growth on Fixed Line & Broadband customers

Revenue Improvements

• 3 industry dialogues conducted thus far

• Access infrastructure roll-out has commenced in 22 exchange areas

• Retail trial by end 09 in TTDI, Subang Jaya, Bangsar & Shah Alam follow by commercial roll- out in 1Q10

HSBB

* Business As Usual

Key Takeaways


Thank You

www.tm.com.my

[email protected]

17

Tmq209 present

Technology

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