Published August 21, 2008

Telekom's Q2 net profit slumps 61%

Email this article
Print article
Feedback

(KUALA LUMPUR) Telekom Malaysia, the country's top fixed-line operator, reported on Tuesday a 61 per cent drop in quarterly profit, hit by falling voice revenues.
Talking tough: Its earnings fell on declining voice revenues but it's confident it'll stay profitable in the current fiscal year as increased data and broadband Internet services cushion falling voice services.

Telekom Malaysia, which has more than 90 per cent of the fixed-line and broadband market, earned RM273.17 million (S$115.8 million) in the second quarter ended June 30.

That compared with a net profit of RM701 million or 20.5 sen a share a year earlier.

It declared a dividend of 12 sen a share.

The state-controlled company said that it would remain profitable in the current fiscal year as increased data and broadband Internet services help to cushion the impact of declining voice services.

Telekom Malaysia was expected to post a 68 per cent drop in full-year profit to RM808.55 million or 23.5 sen a share, according to Reuters Estimates.

Telekom spun off its mobile phone and overseas operations in April while keeping the fixed-line data, voice and broadband business.

It said it would continue discussions with the government on a multi-billion ringgit project to build the country's high-speed broadband network following the demerger.

'Telekom Malaysia will continue to engage the government on the high speed broadband project as it believes it has submitted a comprehensive and detailed proposal and is confident to deliver high quality high-speed broadband services to the business and consumers,' it said in a statement.

The government had earlier postponed a signing ceremony with Telekom on the project for the second time in two months, fuelling talk that Telekom may not be the main contractor for the project. Telekom Malaysia shares fell 6.6 per cent in the three months to June 30, compared with a 4.9 per cent loss in the benchmark index. They dropped 2 sen, or 0.6 per cent, to close at RM3.48 yesterday. -- Reuters