TM Q4 net profit soars

TM Q4 net profit soars to RM631.6m


MALAYSIA'S most valuable phone firm, Telekom Malaysia Bhd (TM), soundly beat market expectations as it reported a better fourth quarter net profit due to higher overseas contribution and foreign exchange gains.Analysts had expected TM, which proposed to pay more than half of its net earnings, to make about RM500 million in the quarter to December 31 2006.

TM posted a net income of RM631.6 million in that quarter. This is a stark difference from 2005 when it made a loss of RM701.3 million because of a large legal claim it settled with Germany's Deutsche Telekom.

"The substantial rise in net profit was due to better cost management, foreign exchange gain and the absence of an arbitration award compared to the previous year," TM chief executive officer Datuk Abdul Wahid Omar said at a briefing in Kuala Lumpur yesterday.
TM's fourth quarter revenue climbed 18 per cent to RM4.41 billion, helped by higher revenue from Indonesia's Excelcomindo, Sri Lanka's Dialog Telekom Ltd and its business in Bangladesh.
"For 2006, our overseas operations contributed to 25 per cent of group revenue, a significant jump from only 13 per cent in 2005," TM chairman Tan Sri Md Radzi Mansor said.
For the full year, TM's net profit jumped two-and-a-half times to RM2.07 billion from RM811.3 million a year earlier. Its revenue rose 18 per cent to RM16.40 billion, beating analysts' forecast of RM16 billion.
Wahid also said TM will continue to seek more opportunistic investments in regional markets.
The main focus for Celcom, its local mobile arm, will be to raise its revenue market share.
"Celcom will focus on customer centricity in its service offerings, expand enterprise channels and tap further into the growing mobile data segment," he said.
Asked on planned capital expenditure this year, chief financial officer Bazlan Osman said:
"Capital expenditure will be more than last year because we're expanding our businesses in Indonesia, Sri Lanka and Bangladesh." Last year, TM spent RM5.42 billion on capital expenditure.
For 2006, TM is planning dividend payout of RM1.14 billion which is 55 per cent of the group's net profit.
"This is in line with the dividend payout policy of between 40 per cent and 60 per cent of profit attributable to shareholders," he said.
Basically, the gross dividend payout works out to 46 sen a share, higher than 35 sen a share in 2005.
TM also met two of its three key performance indicators. It fell short in its revenue target of RM17 billion.
However, TM achieved the 45.9 per cent operating profit margin and exceeded the 10.6 per cent target for return on capital employed.