KUALA LUMPUR: Telekom Malaysia Bhd (TM) is not making any upward revision to its market guidance for the year ending December 31, 2022 (FY22) after posting the highest quarterly net profit in 10 years in the second quarter (Q2), group chief executive officer Imri Mokhtar said.
"We do expect the growth momentum to continue towards the second half (2H) of the year.
"We are keeping our market guidance of a low to mid single-digit growth in revenue and earnings before interest and taxes (EBIT) to be more than RM1.80 billion, driven by our three lines of business - unifi, TM One and TM Wholesale.
"We are confident in delivering that (market guidance. Any revision in market guidance will be made later in the year towards the Q3," he told reporters at the second quarter (Q2) financial results briefing here today.
TM is also allocating capital expenditure (capex) of between 14 per cent and 18 per cent of its revenue, versus 14.7 per cent it spent in FY21.
TM's net profit in Q2 ended June 30, 2022, surged 73 per cent year-on-year (YoY) to RM378.06 million from RM218.59 million in the same quarter last year.
This was despite higher foreign exchange loss on borrowings as well as a higher effective tax rate as the group applied the 33 per cent Cukai Makmur statutory tax rate accordingly for the current quarter.
Revenue for the quarter rose 11.8 per cent YoY to RM3.09 billion from RM2.76 billion with an increase in revenue from all lines of services, particularly data and Internet services.
The stronger revenue was achieved on the back of continuing controlled spending led to the group recording an 82.7 per cent increase in operating profits before finance costs which was RM697.8 million for Q2 compared to RM382.0 million in the same quarter last year.
TM has declared an interim dividend of nine sen per share, in line with its policy to distribute yearly dividends of 40-60 per cent of its net profit.
RHB Research said it expected FY22 to be another banner year for TM, supported by the good execution of its transformation programme, as well as the robust growth in internet and wholesale revenues.
The firm said TM's Q2 FY22 core earnings surged 11.2 per cent quarter-on-quarter (QoQ) (+48.3 per cent YoY) against weak Q1 FY22 revenue seasonality and the good operating expenditure (opex) savings from the performance improvement programme.
RHB said this brought 1H FY22 adjusted core earnings to RM718 million, at 61 per cent of its forecast and 65 per cent of consensus.
RHB has maintained its forecasts pending TM analysts' briefing this morning, as well maintained its "Buy" call with an unchanged target price of RM7.80.