This article first appeared in The Edge Financial Daily on November 27, 2019 - December 3, 2019

KUALA LUMPUR: Telekom Malaysia Bhd (TM) returned to the black in the third quarter ended Sept 30, 2019 (3QFY19), with a net profit of RM261.31 million compared to a net loss of RM175.59 million a year ago, on lower operating cost from the group’s cost optimisation initiatives.

It reported earnings per share of 6.95 sen for 3QFY19 compared to a loss per share of 4.67 sen for 3QFY18.

Its revenue for the quarter, however, fell 3.2% to RM2.85 billion from RM2.95 billion a year ago.

For the cumulative nine months (9MFY19), TM’s net profit surged 718.9% to RM683.77 million from RM83.5 million a year ago. Stripping off non-operational items, its normalised net profit stood at RM810.9 million, up 53.7% against that for the same period last year.

This was despite a 3.8% decline in revenue for the period to RM8.4 billion from RM8.73 billion for 9MFY18, mainly due to lower contributions from all lines of products except data and non-telecommunication-related services.

In a filing with Bursa Malaysia yesterday, TM said the total capital expenditure was within guidance at 8.8% of revenue or RM736 million. “Of the amount spent, 16% was for core network, 58% for access and the balance 26% for support system,” it added.

Reviewing its quarterly results, TM group chief executive officer Datuk Noor Kamarul Anuar Nuruddin said overall, the utility giant saw continued improvements in its fundamentals in 3QFY19.

“We managed to keep a closer eye on our operational efficiencies to deliver sustained profitability with lower year-to-date opex (operating expenditure) or revenue.

“However, in line with the sector’s contraction, our revenue challenges still persist on the retail front, in line with our expectations and the market guidance for 2019,” he said in a separate statement.

On prospects for the financial year ending Dec 31, 2019, Noor Kamarul said the group’s performance improvement initiatives and efficient cost management continue to improve profitability.

“Our focus remains towards our customers, and to strengthen the group’s performance by investing to improve customer experience across segments to grow our revenue,” he said.