KUALA LUMPUR (May 21): Telekom Malaysia Bhd (KL:TM) reported a 19.87% decline in net profit for the first quarter, weighed down by a one-off write-down of RM127.3 million for unutilised prepaid 5G capacity, despite recording higher revenue.

The write-down was linked to the company’s decision to exit Digital Nasional Bhd (DNB) in February. In March, the telecom company maintained that its termination of the 5G access agreement with DNB was valid, despite DNB saying the agreement was still legally binding and remained in effect.

Net profit for the first quarter ended March 31, 2026 (1QFY2026), came in at RM321.51 million, compared with RM401.26 million a year earlier, while revenue rose 2.92% to RM2.93 billion from RM2.85 billion.

In a filing with Bursa Malaysia on Thursday, TM said that excluding the write-down and other one-off items, its underlying profit after tax and non-controlling interests (Patami) increased 9.3% year-on-year to RM436.3 million.

Earnings before interest and tax (Ebit) fell to RM430.6 million from RM550.3 million previously, affected by higher mobile network infrastructure sharing costs and foreign exchange losses on operations. 

The group declared an interim dividend of 6.5 sen per share — equivalent to 78% of reported Patami — payable on June 25.

In a statement, group chief executive officer Amar Huzaimi Md Deris said TM entered 2026 on a solid footing, supported by efforts to strengthen its quad-play offerings spanning mobile, TV and smart home solutions.

“This was further complemented by encouraging growth in our business-to-business (B2B) and carrier-to-carrier (C2C) segments, particularly in digital services such as cloud, cybersecurity, smart services, artificial intelligence and data centres.

“All of these contributed to a 9.3% increase in underlying Patami, reflecting the resilience of our core operations and affirming that our PWR 2030 strategy is delivering sustainable value creation,” he said.

Looking ahead, TM maintained a cautious outlook amid ongoing uncertainties but remains on track to meet its FY2026 guidance.

“Moving forward, we will continue executing our strategic priorities with discipline to drive growth, while supporting Malaysia’s competitiveness in the global digital economy,” Amar added.

TM shares closed nine sen or 1.21% lower at RM7.34 on Thursday, valuing the group at RM28.17 billion.