Published August 24, 2009

Telekom Q2 profit slips 2.6% in absence of mobile income

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(KUALA LUMPUR) Telekom Malaysia Bhd, the nation's biggest fixed-line telephone operator, said that profit fell in the second quarter from a year earlier without the income from its mobile phone operation that was spun off in 2008.
Dropped calls: Profit would have more than doubled from RM114.7 million last year if mobile phone earnings were excluded from the 2008 figures

Net income slid 2.6 per cent to RM266 million (S$109 million) in the three months ended June 30 compared with RM273.2 million a year earlier, the company said in a statement to the stock exchange in Kuala Lumpur last Friday. Revenue rose 0.9 per cent to RM2.13 billion.

Profit would have more than doubled from RM114.7 million last year if mobile phone earnings were excluded from the 2008 figures, helped by foreign exchange gains after the ringgit strengthened against the US dollar, Telekom said. It also announced an interim dividend of RM358 million, or 10 sen a share.

Kuala Lumpur-based Telekom separated the mobile business in April last year, cutting off earnings from units across Asia. The company said last Friday that it is on schedule to meet a target to pay RM700 million in total dividends for the full year.

'Higher revenue from Internet and multimedia, other telecommunication-related services and non-telecommunication related services' mitigated the decline in voice revenue, the company said.

Telekom had foreign exchange gains of RM123.2 million in the quarter, compared with a loss of RM74.9 million a year earlier, it said. The ringgit rose 3.8 per cent against the US dollar in the second quarter, according to Bloomberg data.

Telekom plans to spend RM350 million over the next three to four years for the content of an Internet- television service that it plans to start next year, chief executive officer Zamzamzairani Isa told a press conference in here last Friday.

'These are challenging times,' he said, referring to the economic situation. The company is committed to meeting its revenue and earnings targets this year, he said.

The earnings announcement came after the market closed. Telekom shares were unchanged at RM3.05 last Friday. The stock has fallen one per cent this year, compared with a 33 per cent gain in the benchmark stock index. -- Bloomberg