This article first appeared in The Edge Malaysia Weekly on September 16, 2024 - September 22, 2024

TIME dotCom Bhd (KL:TIMECOM) has shown robust earnings growth and capital appreciation over the past few years. From the financial year ended Dec 31, 2020 (FY2020) to FY2022, the company’s profit rose steadily from RM328 million to RM449.9 million.

A significant leap occurred in FY2023, with TIME’s profit surging to a record high of RM2.57 billion, bolstered by gains on the partial divestment of its data centre business — held via AIMS Group — to US digital infrastructure assets investor DigitalBridge Group Inc.

This significantly lifted TIME’s risk-weighted three-year profit after tax (PAT) compound annual growth rate (CAGR) between FY2020 and FY2023 to 123.2% — the highest among peers to bag it The Edge Billion Ringgit Club (BRC) award for highest growth in profit after tax over three years in the Telecommunications & Media sector.

TIME’s share price also rose to new highs, buoyed by the promise of special dividends from the proceeds of the sale. During the awards evaluation period, TIME’s share price appreciated from RM3.591 as at end-March 2021 to RM5.18 by end-March 2024, reflecting a total return on CAGR of 13% per year over the period and also bagging TIME the award for the highest returns to shareholders over three years under the Telecommunications & Media sector.

Following the partial divestment of shares in AIMS Data Centre Holding Sdn Bhd and AIMS Data Centre (Thailand) Ltd in April 2023, TIME declared a special interim tax-exempt (single-tier) dividend of 54.4 sen per share — about half of the proceeds from the AIMS divestment — and paid this to shareholders on May 26, 2023. The group then declared a special interim tax-exempt (single-tier) dividend of 16.25 sen per share on Aug 18, 2023, which was subsequently paid out on Sept 15, 2023. On Feb 29 this year, TIME declared an ordinary interim dividend of 8.25 sen and a special interim tax-exempt (single-tier) dividend of 6.9 sen per share for FY2023. The dividends were paid out on March 27.

Excluding gains from the AIMS divestment and other one-off items, TIME said its adjusted consolidated net profit for FY2023 would have still been RM402.9 million, a 7% increase from RM375.6 million in FY2022 on the back of higher revenue, higher interest income and associate profits.

“We are on track with our network coverage expansion plans even as we continue to innovate to deliver products and services that better serve our customers. The group has delivered broad-based growth thus far and is well aware that to keep growing is to constantly evolve. On that note, we continue to refine our strategies for sustained long-term results,” TIME’s commander-in-chief Afzal Abdul Rahim said in a statement dated Feb 29 in conjunction with the release of its FY2023 results.

TIME is a telecommunications service provider that delivers domestic connectivity across the retail market segment as well as international and domestic connectivity, cloud computing and managed service solutions that cater to the wholesale and enterprise market segments across the Asean region.

In addition to TIME’s extensive domestic fibre-optic network that covers Peninsular Malaysia, the group has also extended its reach into the region. Its fibre-optic network assets span across Singapore, Thailand, Vietnam and Cambodia — countries in which it has established an operational presence.

With stakes in international subsea cable systems such as Unity, Faster, Asia Pacific Gateway (APG) and Asia Africa Europe-1 (AAE-1), TIME dotCom says it can seamlessly connect Europe, Africa and Asia all the way to the US western seaboard. This extensive reach allows the group to cater to the needs of the global bandwidth market.

Through a strategic partnership with affiliates of DigitalBridge Group, TIME says it can still capture significant opportunities in underserved markets across Asia in the highly connected, ecosystem-centric data centre segment.

The single-largest shareholder of TIME is Pulau Kapas Ventures Sdn Bhd, which is jointly owned by Khazanah Nasional Bhd, Afzal and executive director Patrick Corso.

In the Annual Report 2023, TIME chairman and non-executive director Elakumari Kantilal wrote that the pure fibre broadband service provider was able to sustain its growth through 2023 owing to decisions made that have allowed the group to stay on its business trajectory.

She recalled that in late 2022, TIME made the “bold, market-leading move” to introduce the nation’s fastest consumer broadband service, TIME Home Fibre 2Gbps. This was well received and affirmed the market’s hunger for bandwidth.

“To deliver on the promise of ensuring our customers experience the most consistent connection, we then turned our attention to indoor connectivity,” Elakumari added.

In 2023, TIME introduced the latest in Fibre-to-the-Room (FTTR) technology to Malaysian homes, delivering gigaspeed access to every room via the laying of optic fibres in a discreet manner throughout the property.

“This eliminates the issue of WiFi dead zones that have long plagued some home broadband users,” she said.

In a research report in July, BIMB Securities Research highlighted that the rising adoption of artificial intelligence (AI) is creating new opportunities for data centre service providers and prompting a strategic shift to accommodate AI workload requirements.

“Looking ahead, we expect significant contributions from data and data centre operations driven by growing demand for data. We favour TIME due to the group’s positive momentum from ongoing expansion efforts,” the research house said, adding that the increasing digitalisation across various industries further boosts the need for data.

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