This article first appeared in The Edge Malaysia Weekly on August 17, 2026 - August 23, 2026

Sustaining earnings growth remains critical for home-grown telecommunications and digital infrastructure services provider REDtone Digital Bhd (KL:REDTONE), which has clinched The Edge Malaysia Centurion Club Corporate Awards for the Highest Return on Equity (ROE) Over Three Years in the telecommunications, media and utilities sector for five consecutive years.

Despite REDtone’s ROE declining by more than half from 24.36% in FY2023 and 21.81% in FY2024 to 9.5% in FY2025, its three-year weighted ROE of 16.2% during the awards evaluation period (FY2023 to FY2025) remained ahead of industry peers.

But business pressures are evident, with net profit breaking four consecutive years of growth since the financial year ended June 30, 2020 (FY2020), to decline 55.5% year on year to RM26.6 million in FY2025, from RM59.8 million in FY2024.

Its share price had also come under pressure.

At the Centurion Club awards’ cut-off date of March 31, 2026, REDtone’s market capitalisation had also halved to RM224.15 million.

Four months on, REDtone’s share price performance remained lacklustre, with the stock closing at 31.5 sen and a market capitalisation of RM243.48 million as at July 31, 2026.

REDtone started out in 1996 as a provider of voice services and debuted on the ACE Market in 2004 as REDtone International Bhd. It became an associate of Berjaya Corp Bhd (KL:BJCORP) in December 2014. From holding as much as 40.79% in REDtone on Sept 27, 2024, Berjaya Corp recently trimmed its stake from 36.65% to 34.06% after Juara Sejati Sdn Bhd disposed of 20 million shares on May 28, 2026, stock exchange filings show.

Berjaya Group founder Tan Sri Vincent Tan Chee Yioun, however, is no longer deemed interested in the stake, which is held through Berjaya Corp, the ultimate holding company of Juara Sejati.

REDtone will release unaudited full-year numbers for FY2026 by end-August.

For the nine months ended March 31, 2026 (9MFY2026), REDtone’s net profit fell just over two-thirds, or 68.6%, year on year to RM10.65 million from RM33.91 million, steeper than the 39.11% y-o-y decline in revenue to RM147.18 million, owing mainly to a fall in contributions from managed telecommunications network services (MTNS), where several projects had been completed in the previous financial year or were near the end of deployment.

In notes accompanying the 9MFY2026 earnings release, REDtone’s board of directors told investors the company “expects the operating environment to remain highly competitive amid ongoing economic uncertainties and rapid technological change. In response, REDtone is accelerating enterprise-wide optimisation and the adoption of advanced digital and AI-enabled solutions, not only to enhance internal efficiency and scalability, but also to support customers in their digital transformation journeys”.

According to the board, central to this approach is the continued strengthening of the group’s telco and digital technology solutions — encompassing telecommunications services, managed network services, cloud, AI and cybersecurity — “which underpin sustainable growth, recurring revenue expansion, and enhance long-term stakeholder value”.

“Aligned with its strategic growth ambitions, the group is actively participating in high-impact tenders with the government and government-linked agencies, including initiatives under Jendela Phase 2. These engagements reinforce REDtone’s commitment to advancing national digitalisation, strengthening Malaysia’s digital infrastructure, and accelerating enterprise and public-sector transformation across the nation,” it said.

On June 29, REDtone told the stock exchange that it had subscribed to RM13 million worth of unsecured, unrated and unlisted medium-term notes (MTNs) issued by Berjaya IPS Equity Sdn Bhd, a subsidiary of Berjaya Corp.

“The subscription provides REDtone with an opportunity to optimise the utilisation of its internal funds by investing in the MTN, which offers a higher rate of return of 7% per year compared to conventional deposit placements,” it said.

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