KUALA LUMPUR (Aug 20): Telekom Malaysia Bhd's (KL:TM) second-quarter net profit fell 9.3% as higher operating costs — including expenses related to its employee voluntary separation programme Prihatin and sponsorship of the Fifa World Cup 2026 — offset stronger revenue growth.

Net profit for the three months ended June 30, 2026 (2QFY2026) declined to RM365.48 million from RM402.97 million a year earlier. Earnings per share fell to 9.52 sen from 10.5 sen.

The earnings decline reflects costs recognised under the group’s continued Prihatin initiative, as well as strategic investment in the Fifa World Cup 2026 sponsorship, it said. Other operating costs rose 12.1% year-on-year (y-o-y) to RM1.93 billion.

Telekom Malaysia declared a second interim dividend of seven sen per share for the financial year ending Dec 31, 2026 (FY2026), payable on Sept 18.

Revenue for the quarter rose 6.8% to RM2.96 billion from RM2.77 billion on broad improvements across its segments.

In a bourse filing on Thursday, Telekom Malaysia said revenue from its business-to-consumer segment (Unifi) grew 5.3% y-o-y, supported by stronger adoption of device-bundled and converged offerings. Customer base expanded 1.4% to 3.2 million.

Revenue from the business-to-business segment (TM One and Credence) rose 3.3% on sustained demand in non-connectivity services, supported by robust growth in data centre, information and communications technology solutions and cloud services, while carrier-to-carrier (TM Global) revenue rose 12% on sustained momentum across data centre, international data and 5G backhaul services.

For the cumulative six months ended June 30, 2026 (1HFY2026), net profit declined 14.6% y-o-y to RM687 million, while revenue rose 4.8% to RM5.9 billion.

“We have taken bold but necessary strategic actions in the first half to strengthen TM's efficiency, competitiveness and profitability in the long run,” Telekom Malaysia group chief executive officer Datuk Amar Huzaimi Md Deris said in a statement.

Telekom Malaysia maintained its 2026 guidance for low, single-digit revenue growth, earnings before interest and taxes at a similar level to 2025 and capital expenditure (capex) equivalent to 18% to 20% of revenue.

Capex stood at RM555.7 million in 1HFY2026, representing 9.4% of revenue, with spending focused on data centres, cloud, GPU-as-a-Service and access to 5G. Capex is expected to catch up in the second half as the group accelerates planned investments, in line with its full-year guidance.

Telekom Malaysia shares closed three sen or 0.37% higher at RM8.10 on Thursday, valuing the company at RM31.09 billion. The stock has gained 2.14% so far this year.

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