telecoms malaysia financial analysis

The group operates through four segments: retail, global, wholesale and shared services/others. The retail segment provides various telecommunication products, services and communication solutions to consumers, small and medium-sized enterprises, corporate and government customers. TM offers a range of voice services, internet/broadband services, data services and information communication technology services.

Vision and Mission of Telecoms Malaysia

Bertha TM believes connections make everything possible. Therefore, as Malaysia’s leading provider in information communications technologies, it strives to provide the right connections to help people bring their close ones closer. From the way it operates to what it intends to accomplish both on the local and international front, TM applies and holds close a vision of excellence created towards making people’s life better. 1-2. 1 . Vision To be Malaysia’s leading new generation communications provider, embracing customer needs through innovation and execution excellence.

The telecoms net profit for the full year increased 6. 1% to RMI . Bill, or 35. 3 seen earnings per share (PEPS) from RMI . Bill, or 333 seen PEPS a year ago. Its normalized profit after tax and minority interest (Patti), excluding mainly the main on deferred tax income and unrealized fore gain, stood at ARMOR mil in 2012, up 38. 8% against ARMOR. Mil in 2011. For the full-year period of financial year ended December 2013 (PUFFY 3), its revenue recorded was RMI,628. 70 million versus ARM,993. 50 million a year ago with an increase of 6. 4% over the previous year-Its net profit stood at RMI ,012. 0 million versus RMI , 263. 70 million in PAYOFF, with a decrease of 19. 9% over 2012.

Expenses to Revenue Ratio

Expenditure (ARM ‘0000) 7,792. 70 8,015. 40 8,313. 20 8,972. 00 9,378. 30 Revenue (ARM ‘0000) Expenditure/Revenue . 905 0. 912 0. 908 0. 898 0. 882 Table 3 Figure 3: Expenses to Revenue Ratio Graph Expenses to revenue ratio are a measurement in allocating the operating expenses ratio. It is equal to a company operating expenses divided by its revenue. It shows in the graph above in year 2009, indicates Telecoms Malaysia (TM) spend ARM 0. 91 to generate ARM 1. 0 of revenue and the trend of ration continuing until 2011. In 2012 and 2013, the ratio is decrease ARM 0. 01 which bring to ARM 0. 90 to generate ARM 1. 00 of revenue. Even the ratio decreased by ARM 0. 01, it still profitable for the company.

Factors for increase and decrease in Revenue

Based on the five historical years, net profits decreased primarily due to foreign exchange loss on borrowings in the current financial year compared with a gain of previous year. According to TM, another contributing factor for decrease in net profits was the lower deferred tax income on untilled tax incentives.

For the larger full-year revenue, TM attributed it primarily to higher revenue from data, Internet and multimedia, and other telecommunications related services, mitigated the decline in voice and non-telecommunications related services. The group said the larger increase in revenues was driven primarily by the increase in Unify customer base at the end of the current financial year compared to previous financial year. In addition, higher take-up of premium channels and video-on-demand as well as up-selling of Streamer also contributed to the revenue growth.

Furthermore, TM said demand for bandwidth continue to increase as customers become more savvy on the value of broadband, encouraged by the proliferation of smart devices as well as increased usage of applications and Over-the-Top (TOT) video content.

Return on Investment (ROI)

Return on investment (ROI) is performance measure used to evaluate the efficiency of investment.

ROI also measures the profit or loss of each investment that company involved. ROI will deals with money invest in the company. The result indicates the profitability on the assets of the firm (after all expenses and taxes). It is one of most commonly used approaches for evaluating the financial consequences of business investments, decisions, or actions. If an investment has a positive ROI and there are no other opportunities with a higher ROI, then the investment should be undertaken. A higher ROI means that investment gains compare favorably to investment costs.

From the table and graph above, Telecoms Malaysia (T M) have a positive ROI but in a low value. On 2009, every RMI . 00 of the assets available, it can generate ARM 0. 0338 of net profit. TM trend shows an increasing of 2. 61% in 2010 which is means from ARM 1. 0 of assets, the group of company generates ARM 0. 0261 greater than year 2009. Year 2011 is slightly lower from 2010 in 0. 20% and the company able manage to increase 0. 09% in 2012. In 2013, shows in every RMI. OOH of the investments, the company able to generate 4. 95% of profit. Even though the ROI of TM is low in value, however the investments are still making its profit. . 6. Growth rates in MYRA Year on year, both dividends per share and earnings per share excluding extraordinary items growth dropped 25. 91% and 19. 90%, respectively.  Additionally when measured on a five year annulled basis, both dividend per hare and earnings per share growth ranked in-line with the industry average relative to its peers.

Return on Asset Ratio Net Profit

The return on assets ratio, often called the return on total assets, is a profitability Asia that measures the net income produced by total assets during a period by comparing net income to the average total assets. In other words, the return on assets ratio or ROAR measures how efficiently a company can manage its assets to produce profits during a period.

From the table above, as we can see Telecoms Malaysia (TM) generate 6. 75% of each Ringing invested in assets in 2009. The trend in 2010 shows it increase to 1 1. 98% which is 5. 23% higher than the year before. This shows that the management are efficiently in investing their assets in 2010. From year 2010 until 2013, the trend shows up and down but in a small percentage. ROAR indicates the number of cents earned on each Ringing (ARM) of assets. Thus higher values of return on assets show that business is more profitable.

Return on Equity (ROE)

Return on equity (ROE) is the amount of net income returned as a percentage of shareholders equity. It reveals how much profit a company earned in comparison o the total amount of shareholder equity found on the balance sheet. ROE is one of the most important financial ratios and profitability metrics. It is often said to be the ultimate ratio or the ‘mother of all ratios’ that can be obtained from a company’s financial statement.

It measures how profitable a company is for the owner of the investment, and how profitably a company employs its equity. From the table, we can see figure out up and down trend for 5 years in a row. From the table, Telecoms Malaysia (TM) generated ARM 0. 19 of profit for every Ringing of shareholder equity in 2009. Within a year, TM manages to increase their ROE by ARM 0. 13 in difference in 2010 which is 32. 30% in percentage value. Year 2010 until 2012 shows an average of ROE within 32% to 38% In 2013, it showed a decrease percentage to 29% which the company generated ARM 0. 9 of profit for every ARM 1. 00 of shareholder equity but the value is still higher than 2009. The ratio strongly depends on many factors such as industry, economic environment (inflation, macroeconomic risks, etc. ). The higher ROE can be the result of high financial leverage, but if too high financial leverage it can cause to proposition for company’s insolvency.


In conclusion, base on the analysis of annual report of Telecoms Malaysia enclose within 5 years from 2009-2011, we can showed this company are steady growing in telecommunication services.

Refer to performance management of Telecoms Malaysia (TM), every year they will make a profit which revenue is continuing rising year by year from ARM 8,607,991 to ARM 10,628,679. For net income within 5 years of financial annual report shows the amount is increasing from 2009 until 2012, however in 2013 the result decrease slightly. The situation arouse because f they need to struggling with other competitors, economic condition which slowly progress and staff changes and dealing with demand by consumers.

Other than that, refer to the performance return on Investment (ROI), return on Asset (ROAR) and return on Equity (ROE) it shows that the telecommunication services under TM business purposes still making profit and increase the revenue. Even though they have slightly market fluctuation during these 5 years, it not gives too much impact to keep TM steady and firm aligning in telecommunication industries which they often generate strategies to retain growth on it.

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