|
Type |
Announcement |
| Subject | TELEKOM MALAYSIA BERHAD : ECONOMIC PROFIT FOR THIRD QUARTER ENDED 30 SEPTEMBER 2006 |
Contents :
In an effort to enhance greater transparency to the public, Telekom Malaysia Berhad (TM) wishes to announce its Economic Profit for the 3rd Quarter ended 30 September 2006 (3Q06). Quarterly announcement of TM’s economic profit/(loss) is part of the broader performance management framework that TM has in place, as prescribed under the Government Linked Company (GLC) Transformation programme, and is disclosed on a voluntary basis.
Economic Profit is a yardstick to measure shareholder value as it provides a more accurate picture of underlying economic performance of TM Group vis-à-vis its financial accounting reports.
TM’s 3Q06 EP has significantly increased by RM122.8 million quarter-on-quarter to RM137.1 million (858.7%) when compared to 2Q06 though year-on-year EP showed a reduction of RM124.1 million from RM261.2 million in 3Q05 (47.5%). As for the cumulative period, the YTD September 06 EP (RM368.3 million) showed a marked improvement of RM163.8 million (80.1%) when compared to YTD September 05 (RM204.5 million).
 |
INDIVIDUAL PERIOD
|
CUMULATIVE PERIOD
|
|
Current Year Quarter
3Q06 RM’Mn |
Preceding Year Corresponding Quarter
3Q05 RM’Mn |
Current Year To Date
3Q06 RM’Mn |
Preceding Year Corresponding Period
3Q05 RM’Mn |
| Earning before Interest & Taxes (EBIT) |
860.7
|
1,000.8
|
2,531.1
|
2,194.2
|
| Adjusted Tax |
241.0
|
280.2
|
708.7
|
614.4
|
| NOPLAT |
619.7
|
720.6
|
1,822.4
|
1,579.8
|
|
|
|
|
|
| Average Invested Capital |
5,285.8
|
4,836.0
|
15,857.5
|
14,507.9
|
| WACC |
9.13%
|
9.50%
|
9.17%
|
9.48%
|
| ECONOMIC CHARGE |
482.6
|
459.4
|
1,454.1
|
1,375.3
|
|
|
|
|
|
| ECONOMIC PROFIT |
137.1
|
261.2
|
368.3
|
204.5
|
TM recorded a lower NOPLAT of RM619.7 million for 3Q06, a 14.0% decrease from RM720.6 million registered in 3Q05.
Despite the higher operating profit for 3Q06 of RM818.5 million when compared to 3Q05 of RM664.6 million, EBIT for 3Q06 is lower mainly due to lower other income by RM239.0 million when compared to the same corresponding period.
This is mainly due to higher investment income in 3Q05 as compared to 3Q06 resulting from gain on disposal & dilution following the IPO of Dialog Telekom Limited (Dialog) (RM258.7million) in 3Q05.
For the cumulative period, the increase in EBIT was mainly due to the contribution from PT Excelcomindo Pratama Tbk (XL), net of the absence of above-mentioned gain on disposal and dilution on IPO of Dialog.
Economic Charge
TM recorded an increase of 5.1% in Economic Charge to RM482.6 million for 3Q06 as compared to 3Q05 of RM459.4 million.
The increase is due to higher Average Invested Capital (AIC) in 3Q06 of RM21.2billion as compared to RM19.3billion in 3Q05. Higher AIC is attributed to:
- Increase in Average Net Working Capital (NWC) by RM1.3 billion mainly from increase in Trade & Other Payables of RM 1.21 billion from 3Q05 to 3Q06. This is mostly contributed from XL of RM731 million and Celcom (Malaysia) Berhad of RM429 million.
- Increase in average net PPE by RM3.1billion, which was mainly from the consolidation of XL Net PPE of RM4.1 billion.
However the impact of higher AIC is slightly offset by the lower Weighted Average Cost of Capital (WACC). In 3Q06, TM’s WACC was 9.13% when compared to 9.50% in 3Q05.
The decrease in WACC was primarily attributed to:
- Reduction in total equity by RM3.3 billion mainly due to decrease in market capitalization in 3Q06 (RM30.8 billion, average 3 months share price was RM9.06) as compared to 3Q05 (RM36.0 billion, average 3 months share price was RM10.63).
- Higher total borrowings by RM2.0 billion year-on-year which were mostly contributed by XL of RM2.2 billion, resulting in a high proportion of debt that further brought down the WACC.
Announcement Info
| Company Name | TELEKOM MALAYSIA BERHAD |
| Stock Name | TM |
| Date Announced | 28 Nov 2006 |
| Category | General Announcement |
| Reference No | TM-061128-33164 |