KUALA LUMPUR (May 30): Telekom Malaysia Bhd (KL:TM), Malaysia’s state-owned fixed-line operator, said on Thursday its net profit rose 29% in the first quarter from a year earlier, mainly due to lower operating costs.

Net profit for the three months ended March 31, 2024 (1QFY2024) was RM424.81 million compared with RM330.1 million over the same period last year, TM said in an exchange filing. Revenue for the quarter edged up 1.8% year-on-year to RM2.84 billion from RM2.79 billion.

“The operating environment remains challenging as we enter 2024, with increased competition, evolving customer preference and potential increases in business costs,” TM said. "Growing our core business remains our top priority while we continue strengthening our efforts towards driving new growth areas and digital solutions.”

The company did not declare any dividend for the quarter.

Broadly, TM maintained “a positive outlook” for the current year, in line with the previously stated guidance for 2024.

The company has previously announced “low-single-digit” revenue growth and for earnings before interest and tax to come in at RM2.1 billion to RM2.2 billion while capital expenditure as a proportion of revenue will likely be between 14% and 18% for 2024.

Earnings before interest and tax surged 38% year-on-year to RM650.9 million in 1QFY2024 as revenue at its infrastructure segment under TM Global rose while subscribers of Unifi service expanded.

Capital expenditure for 1QFY2024 totalled RM204.0 million, or 7.2% of its revenue, which went into expanding its network infrastructure nationwide and regional submarine cable systems.

In terms of segments, Unifi’s fixed broadband subscribers grew 1.8% to 3.14 million though revenue fell 2.7% in 1QFY2024 to RM1.4 billion due to the decline in voice and mobile services.

Operating revenue at TM One — which houses its managed services, data centres, and cybersecurity services — fell 0.8% to RM673.0 million as price adjustments for large service contracts offset growth in new services and solutions.

TM Global, the wholesale business arm of TM, reported a 12.1% increase in revenue to RM742.8 million mainly from domestic and international data services.

Shares of TM slipped 2.2% to RM6.26 on Thursday ahead of the results announcement. The company, largely controlled by sovereign wealth fund Khazanah Nasional Bhd, is valued at over RM24 billion on Bursa Malaysia.