Published November 12, 2008

Forex loss puts Telekom in the red

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(KUALA LUMPUR) Telekom Malaysia Bhd, Malaysia's biggest fixed-line operator, posted its first quarterly loss in almost three years because of foreign exchange losses and said that it expects 2008 to 'remain challenging'.

The company posted a loss of RM165.8 million (S$69.9 million), or 4.8 sen a share, in the third quarter ended Sept 30, from a profit of RM658.5 million, or 19.2 sen a share, a year earlier, according to a stock exchange filing. It had a foreign exchange loss of RM195.7 million, compared with a RM49 million gain a year earlier.

Malaysia's ringgit has fallen 11 per cent against the US dollar in the last six months, boosting Malaysian companies' cost of foreign currency loans. Power utility Tenaga Nasional Bhd last month reported a foreign exchange loss of RM288.8 million in its fiscal fourth quarter.

The global financial crisis has had a 'significant impact' on Telekom's results, particularly on its US$1.1 billion bonds, the company said. Foreign exchange fluctuations will continue to affect its results this year, it said.

State-controlled Telekom, which is the best- performing stock on the Malaysian benchmark index this year, added that it is 'committed' to its 2008 dividend policy. Sales dropped 3.1 per cent to RM2.06 billion, as a decline in voice revenue offset gains in broadband and data, it said. - Bloomberg