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1Q 2012 RESULTS
ANALYST BRIEFING
30 May 2012
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 TM.
Disclaimer
Performance Overview
Financial review
Operating highlights
Concluding remarks
3
Key Operating Indicators
Key Highlights 1Q 2012
Financial Performance
1Q12 vs1Q11
• Operating revenue increased by 11.0% YoY to RM2,383.8mn
• EBITDA grew by 7.1% YoY to RM782.6mn; Normalised EBITDA increased by 7.6% YoY to RM784.6mn
• PATAMI grew by 53.5% YoY to RM 250.6mn; Normalised PATAMI grew by 50.0% YoY to RM183.3mn
• Internet revenue grew 24.3% YoY to RM563.4mn
• Streamyx and UniFi customers cumulatively total 1.97mn, up 11.4% YoY
• UniFi takeup > 26% of premises passed, up from 7.8% in 1Q2011
4
Performance Overview
Financial review
Operating highlights
Concluding remarks
5
Note: EBITDA Margin is calculated as percentage of EBITDA against Revenue + Other Operating IncomeFor Normalised EBITDA and Normalised PATAMI refer Slides 7 & 8
•Excludes FX (Gain )/Loss
RMmnReported Comments
(1Q12 vs. 1Q11)1Q12 4Q11 % Change QoQ 1Q11 % Change YoY
Revenue 2,383.8 2,447.2 -2.6 2,148.2 +11.0 Positive growth by all key products
Other Operating Income
26.6 37.0 -28.1 21.3 +24.9 -
EBITDA 782.6 796.1 -1.7 730.9 +7.1 -
EBITDA margin 32.5% 32.0% +0.5pp 33.7% -1.2pp -
Normalised EBITDA 784.6 808.1 -2.9 729.0 +7.6 -
Normalised EBITDA Margin
32.6% 32.5% +0.1pp 33.6% -1.0pp -
Depn & Amort. 510.6 535.9 -4.7 500.0 +2.1Higher asset base and provision for asset write-off
Other Gains 1.4 5.5 -74.5 0.7 +100.0 -
Net Finance Cost* 41.6 50.6 -17.8 42.7 -2.6 Higher yield on placements
FX (Gain) / Loss (67.9) (14.4) +371.5 (38.4) +76.8Higher due to weakening of USD against RM
Profit Before Tax (PBT) 299.3 229.6 +30.4 227.3 +31.7 -
Normalised PBT 232.0 221.6 +4.7 186.2 +24.6 -
PATAMI 250.6 598.3 -58.1 163.3 +53.5 Higher unrealised forex gain on USD debts
Normalised PATAMI 183.3 240.1 -23.7 122.2 +50.0 -
Group Results 1Q2012
6
Normalised EBITDA
In RM mn 1Q12 4Q11 1Q11
Reported EBITDA 782.6 796.1 730.9
Non Operational
Loss on Sale of Assets - 0.3 0.4
FX (Gain)/Loss on International trade settlement 2.0 12.9 (2.3)
Impairment of AFS – Receivables - (1.2) -
Normalised EBITDA 784.6 808.1 729.0
Normalised EBITDA Margin 32.6% 32.5% 33.6%
Reported EBITDA Margin 32.5% 32.0% 33.7%
EBITDA is calculated as Total Revenue (Operating Revenue + Oth. Operating Income) less Operating Cost (Exc. Depreciation, Amortisation & Impairment).EBITDA Margin is calculated as percentage of EBITDA against Total Revenue
7
In RM mn 1Q12 4Q11 1Q11
Reported PBT 299.3 229.6 227.3
Non Operational
Loss on Sale of Assets - 0.3 0.4
FX (Gain)/Loss on International trade settlement 2.0 12.9 (2.3)
Other (Gain)/Losses** (1.4) (5.5) (0.7)
Unrealised FX (Gain)/Loss on Long Term loans (67.9) (14.5) (38.5)
Impairment of AFS – Receivables - (1.2) -
Normalised PBT 232.0 221.6 186.2
Reported Taxation and Zakat (40.7) 379.9 (52.6)
Reported Non-Controlling Interests (8.0) (11.2) (11.4)
Last Mile Tax Incentives for prior years - (350.2) -
Normalised PATAMI 183.3 240.1* 122.2
Reported PATAMI 250.6 598.3 163.3
Normalised PBT & PATAMI
8
* Included RM127.6mn of tax incentives for 2011**Comprise fair value (FV) changes of FVTPL (FV through P&L) investment and gain/loss on disposal for AFS (available for sale) investments.
23.0 21.2
17.1 18.2
21.219.3
11.910.2
5.07.5
5.0 6.1
4.5 3.9
1.7 2.2
1Q11 1Q12
Bad Debt
Marketing Expenses
Supplies & material
Maintenance Cost
Other operating cost
Manpower cost
Direct cost
Dep & Amortisation
Revenue = Operating Revenue + Other Operating Income
Cost % of Revenue1
Note: The classification of cost is as per financial reporting
(Please refer to Appendix for quarterly details & breakdown)
Continued improvement of cost/revenue ratio
1
9
RM mnRM mn
Total Cost / Revenue ( %)
RM1,938.6
89.4%
RM2,138.4
88.7%
% of Revenue
1Q2012 vs. 1Q2011
•Higher Direct cost due to higher international outpayment and content cost
•Higher Maintenance cost due to customer projects and new maintenance contracts at ITNT
•Higher Supplies & Materials due to higher customer acquisition cost with increased UniFi customers
57 53
2723
1722
0
20
40
60
80
100
120
1Q11 1Q12Access Core Network Support System*
143169
49
6017
58
0
50
100
150
200
250
300
350
1Q11 1Q12
Access Core Network Support System*
86116
22
37
36
0
50
100
150
200
1Q11 1Q12
Access Core Network Support System*
Group Capital Expenditure
** Gross capex to be shared with Government equallyNote: Government coinvestment treated as deferred income, to be amortisedprogressively to match against the depreciation of assets
*Include Application, Support System & Others (building, land improvement, moveable plants,application & other assets)
Higher HSBB capex spend in line with expansion
10
Total Capex
HSBB Capex**
Note : BAU – Business As Usual
RM mn
209
108
9.7
BAU Capex
101
4.7
Capex / Revenue ( %)
189
98
4.1
287
12.0
7.95.0
30 Mar 12 31 Dec 11 30 Mar 12 31 Dec 11Return on Invested Capital 6.29% 5.80% Gross Debt to EBITDA 2.06 1.93
Return on Equity 9.64% 8.09% Net Debt/EBITDA 0.73 0.69
Return on Assets 4.90% 4.47% Gross Debt/ Equity 0.84 0.86
Current Ratio 1.75 1.62 Net Debt/ Equity 0.31 0.29
WACC 6.34% 6.33% Net Assets/Share (sen) 216.0 209.0
31 Mar 12
Group Cash Flow & Key Financial Ratios
31 Dec 11*
RM mn 1Q12 1Q11
Cash & cash equivalent at start 4,212.6 3,488.0
Cashflows from operating activities 242.8 455.9
Cashflows used-in investing activities (541.4) (412.2)
Capex 287.0 209.0
Cashflows from financing activities 147.8 23.5
Effect of exchange rate changes 1.9 0.1
Cash & cash equivalent at end 4,063.7 3,555.3
Free cash-flow (EBITDA – Capex) 495.6 521.9
Cumulative HSBB grant received from Government: RM2.26bn
Strong Balance Sheet to support futurebusiness requirements
1
Based on Normalised PATAMI2
1
11
31 Dec 11*31 Mar 12
* Restated due to adoption of MFRS
2
Based on Normalised EBIT1
Performance Overview
Financial review
Operating highlights
Concluding remarks
12
Voice43%
Data22%
Internet21%
Others14%
306
443359
1Q11 4Q11 1Q12
465546 514
1Q11 4Q11 1Q12
Voice40%
Data21%
Internet24%
Others15%
453541 563
1Q11 4Q11 1Q12
924 917 948
1Q11 4Q11 1Q12
Group Total Revenue by Product
13
Data
RM mn
RM mn RM mn
Voice
Others*
Internet1Q12
1Q11
RM mnRM mn
RM mn
RM2,384mn
RM2,148mn
+3.4%
+2.6%
+4.1%
+24.3%
-5.9%
+10.5%
Positive YoY growth for all products
-19.0%
+17.3%
*Others comprise other telco and non-telco services (i.e ICT-BPO, MMU tuition fees, customer projects)
159194 177
1Q11 4Q11 1Q12
591 639 655
440 474 463
258 266 267328
417 415
1Q11 4Q11 1Q12
Consumer SME Enterprise Government
Retail75%
Global9%
Wholesale9%
Others7%
YoY revenue growth in Retail and Global Lines of Business
182256
225
1Q11 4Q11 1Q12
190 201182
1Q11 4Q11 1Q12
Retail76%
Global9%
Wholesale8%
Others7%
Group Total Revenue by Line of Business
14
1Q12
1Q11
RM2,384mn
RM2,148mn
* Others comprise revenue from VADS (reclassified from retail), Property Development, TM R&D, TMIM, UTSB and MKL
Retail Wholesale
RM mn
RM mnRM mn
RM mn
1,796 1,8001,617
Global Others*
-9.5%
-4.2%
-8.8%
+11.3%
-12.1%
+23.6%
+0.2%
+11.3%
55,156 93,107 139,896 201,842 269,3098,385
15,91224,479
34,65946,436
1Q11 2Q11 3Q11 4Q11 1Q12
UniFi Residential UniFi Business
2,710 2,692 2,633 2,566 2,524
1,607 1,596 1,568 1,546 1,526
64 109 164 237 316
1Q11 2Q11 3Q11 4Q11 1Q12
Fixed Line Residential Fixed Line Business UniFi
1,417 1,425 1,393 1,374 1,356
291 296 314 312 302 64 109 164 237 316
1Q11 2Q11 3Q11 4Q11 1Q12
Streamyx Residential Streamyx Business UniFiNet adds (in thousand)
In thousand
In thousand
+11.4%
+2.7%
Physical Highlights
Broadband Customer Growth
Fixed Line Customer Growth
*Call Usage Only ** Streamyx Net ARPU *** Blended ARPU
Broadband continues to grow, ARPUs stable
1,772
4,381 ARPU (RM) 1Q11 1H11 YTD Sept 11 FY11 1Q12
Fixed Line (DEL)* 33 34 34 34 33
Streamyx Broadband** 77 77 78 78 79
UniFi*** 188 186 184 184 182
1,830
+58
4,397
1,871
+41
4,365 4,349
+52
1,923 1,974
+51
4,366
-0.3%
+0.4%
63,541
+33.5%
+79
Net adds (in thousand)
109,019
+45
+396.9%
164,375
+55+72
236,501315,745
UniFi
ARPU
15
Performance Overview
Financial review
Operating highlights
Concluding remarks
16
Key Takeaways
Financial Performance
Broadband Champion
17
• Operating revenue grew by 11.0% YoY• EBITDA grew by 7.1% YoY• PATAMI grew by 53.5% YoY• Internet & Multimedia revenue grew by 24.3% YoY
• Streamyx and UniFi customers cumulatively grew 11.4% YoY to 1.97mn
• 2mn total broadband customers to date
• UniFi takeup remains strong at ~30% with close to 365,000 customers activated to date
• 1.22mn premises passed over 81 exchange areas, on track to meet PPP obligation of 1.3mn premises passed
• Going outside of PPP areas - driven by demand
UniFi
Information Exchange
• Building on foundation – launched new data center in Hong Kong for ICT-BPO business
Appendices
1Q12 4Q11 1Q11 1Q2012 vs. 1Q2011
Operating Revenue (RM mil) 2,383.8 2,447.2 2,148.2 -
Other Operating Income(RM mil)
26.6 37.0 21.3 -
Direct Costs % 18.2 15.3 17.1 Higher international outpayment and contentcostRM mil. 438.9 379.8 370.2
Manpower % 19.3 19.6 21.2 Lower due to lower bonus provision and VSS costRM mil. 465.6 487.6 459.0
Supplies & Materials % 6.1 7.6 5.0 Higher due to higher customer acquisition cost with increased UniFi customersRM mil. 147.7 187.6 109.5
Bad & Doubtful Debts % 2.2 0.8 1.7 Higher due to impairment at TM Global for UN embargo against TIC Iran preventing recoveryRM mil. 53.2 20.2 35.8
Marketing Expenses % 3.9 5.3 4.5Lower due to lower A&P activities
RM mil. 94.4 132.5 96.7
Maintenance Cost % 7.5 7.6 5.0 Higher due to customer projects and new maintenance contracts at ITNTRM mil. 181.0 189.6 109.2
Other Operating Costs % 10.2 11.7 11.9Lower due to lower professional fees
RM mil. 247.0 290.8 258.2
Depreciation & Amortisation % 21.2 21.6 23.0 Lower due to revision of useful life of certain assetsRM mil. 510.6 535.9 500.0
Total (RM mil) 2,138.4 2,224.0 1,938.6 -
Total (%) 88.7 89.5 89.4 -
Cost % of Revenue
19
7,477.5
162.9
10,053.9
6,402.7
1,559.6
2,072.7
18.9
17,694.3
7,405.8
1,854.8
468.4
4,213.0
869.6
4,558.0
3,923.9
7.7
626.4
2,847.8
14,121.7
724.8
17,694.3
7,726.9
170.9
10,086.8
6,308.3
1,577.0
2,178.5
23.0
17,984.6
7,863.4
2,265.5
606.7
4,064.1
927.1
4,500.8
3,715.2
156.8
628.8
3,362.6
13,906.7
715.3
17,984.6
Shareholders’ Funds
Non-Controlling Interests
Deferred & Long Term Liabilities
Long Term Borrowings
Deferred Tax
Deferred Income
Derivative financial liabilities
Current Assets
Trade Receivables
Other Receivables
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 31 Mar 2012 As at 31 Dec 2011*
Group Balance Sheet
20
* Restated due to adoption of MFRS
769 752 758
270 293 318
448 536 558
138223 171
0
500
1000
1500
2000
1Q11 4Q11 1Q12
Others
Internet
Data
Voice
Consumer37%
SME27%
Enterprise16%
Government20%
Revenue by Business Unit
Consumer36%
SME26%
Enterprise15%
Government23%RM mn
+0.2%
1,617
1Q12
+11.3%
RETAIL
Revenue by Product
1Q11
Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co elimination
RM mn
RM mn
RM1,800mn
RM1,617mn
21
1,796 1,800
55 54 50
149 155145
21 2319
0
50
100
150
200
250
1Q11 4Q11 1Q12
Others
Data
Voice
Others : Include internet
WHOLESALE
Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co elimination 22
Revenue by Product
190 201182
RM mn
-9.5%
-4.2%
MC83%
ASP17%
MC84%
ASP16%
MC : Malaysian Carrier TierASP : Application Service ProviderNote: Pure TM Wholesale customer segment excludes
Fiberail and Fibrecomm
1Q12
1Q11
Revenue by Customer Segment
102126 143
5687
104
922
2
3
0
50
100
150
200
250
300
350
1Q11 4Q11 1Q12
Others
Data
IRU Sales (Data)
Voice
America14%
Europe & AFME15%
Oceania & North Asia
26%
South Asia34%
Others11%
America7%
Europe & AFME17%
Oceania & North Asia
26%
South Asia38%
Others12%
1Q12
1Q11
Others : Include internet
GLOBAL
Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co elimination 23
Revenue by RegionRevenue by Product
182
225
256
RM mn
-12.1%
+23.6%
THANK YOUAny queries please email to : [email protected]
•Investor Relations• Level 11 (South Wing)•Menara TM •JlnPantaiBharu •50672 Kuala Lumpur, Malaysia • Tel (603) 2240 4848/ 7366 / 7388