TM has no plans to restructure debt

KUALA LUMPUR: Telekom Malaysia Bhd (TM) which saw a forex loss of RM14.5 million in the second quarter ended June 30, 2015 (Q2), does not see the need to restructure its debt, explaining that exposure to unhedged foreign currency debt is still manageable.
“If you look at our exposure, we have total debt of RM6.9 billion and foreign currency debt is about 25% of that. We have done hedging also previously. The one that has not been hedged is only about US$200 million (RM844.9 million) which is due in 2025. We hope things will go back to normal and the ringgit will strengthen by then,” its CFO Datuk Bazlan Osman told reporters at a briefing yesterday.
“The US$200 million is about 12% of the total debt so it is quite manageable,” he added.
Bazlan said there is no need for any refinancing or restructuring of debts at the moment, adding that hedging costs is also not cheap.
For the six months ended June 30, 2015, TM saw a forex loss of RM55.7 million compared with a forex gain of RM10 million a year ago, due to the weak ringgit.
For Q2, TM’s profit after tax and minority interest (Patami) fell 1% to RM212.1 million from RM214.1 million a year ago while revenue improved marginally to RM2.84 billion from RM2.82 billion a year ago.
For the six months ended June 30, 2015, Patami fell 19.7% to RM341 million from RM424.7 million a year ago while revenue rose 3.2% to RM5.61 billion from RM5.44 billion a year ago.
It has proposed a single tier interim dividend of 9.3 sen per share or RM349.5 million.
As at June 30, 2015 TM had 2.29 million total broadband customers and 782,000 UniFi customers.
On capital expenditure (capex), Bazlan said it expects to spend 20% of its total revenue for capex this financial year.
The total expenditure for the six-month period was RM686 million or 12.2% of revenue, of which RM428 million was spent in Q2.
“Even with consolidation of the new investment, we are still seeing growth. We are moving in the right direction,” said its group CEO Tan Sri Zamzamzairani Mohd Isa.
“Notwithstanding yes the market is still going to be challenging, there will be heightened competition, these are normal external environment that we face on daily basis. All in all, we are quite positive on the direction that we are heading,” he said.
On P1, Zamzamzairani said it has commenced physical rollout of its network and have advanced in the commercial planning of the products it intends to introduce.