Greetings, fellow investors and market watchers! Today, we’re diving deep into the latest financial pulse of Telekom Malaysia Berhad (TM), a cornerstone of Malaysia’s digital infrastructure. The Group has just released its unaudited results for the first quarter ended 31 March 2025, offering a fresh look at its performance amidst a dynamic market landscape.
While TM continues to demonstrate resilience with a slight uptick in revenue, the report also highlights some shifts in profitability and strategic adjustments to navigate evolving market conditions. Notably, the company’s revenue saw a modest increase, yet its Profit After Tax and Non-Controlling Interests (PATAMI) experienced a decline compared to the same period last year. Let’s unpack the numbers and understand what this means for TM’s journey forward.
Overall Financial Performance: A Mixed Picture
TM’s first quarter results for 2025 present a nuanced financial narrative. While top-line revenue saw a modest increase, profitability was impacted by various factors. Here’s a breakdown of the key figures:
Operating Revenue
Q1 2025
RM 2,851.5 million
Q1 2024
RM 2,837.0 million
The Group’s operating revenue for Q1 2025 edged up by 0.5% (RM14.5 million) compared to the same period last year. This growth was primarily driven by higher revenue contributions from data services, other telecommunication services, and the education segment.
Operating Profit Before Other Gains and Finance Cost
Q1 2025
RM 550.3 million
Q1 2024
RM 650.9 million
Despite the revenue growth, operating profit before other gains and finance cost saw a notable decrease to RM550.3 million from RM650.9 million in Q1 2024. This 15.4% decline was mainly attributed to a shift in the recognition of 5G access costs, higher device costs in line with stronger device revenue, and unfavorable foreign exchange movements.
Profit After Tax and Non-Controlling Interests (PATAMI)
Q1 2025
RM 401.2 million
Q1 2024
RM 424.8 million
Consequently, PATAMI for the quarter decreased by 5.6% (RM23.6 million) to RM401.2 million, reflecting the impact of the aforementioned higher operating costs and foreign exchange effects.
Earnings Per Share (EPS)
Q1 2025 (Basic & Diluted)
10.5 sen
Q1 2024 (Basic & Diluted)
11.1 sen
Basic and diluted earnings per share also saw a slight dip, aligning with the decrease in PATAMI.
Segmental Performance: Shifting Dynamics
Understanding TM’s performance requires a look at its key customer segments:
Business-to-Consumer (B2C)
Q1 2025 Revenue
RM 1,386.4 million
Q1 2024 Revenue
RM 1,396.2 million
The B2C segment experienced a slight decrease of 0.7% (RM9.8 million) in operating revenue. This softer performance was primarily due to increased competition in the Internet market, though it was partially mitigated by growth in device revenue, showcasing the resilience of B2C’s broader offerings.
Business-to-Business (B2B)
Q1 2025 Revenue
RM 668.7 million
Q1 2024 Revenue
RM 673.0 million
B2B revenue also saw a marginal decline of 0.6% (RM4.3 million). However, the segment reported positive traction with an 8.7% (RM19.7 million) growth in “Beyond Connectivity” revenue. This was driven by stronger performance in customer projects, outsourcing business, and ICT services including cloud and cybersecurity, indicating a successful diversification beyond traditional connectivity.
Carrier-to-Carrier (C2C)
Q1 2025 Revenue
RM 760.9 million
Q1 2024 Revenue
RM 742.8 million
The C2C segment stood out with a healthy 2.4% (RM18.1 million) increase in operating revenue. This growth was primarily fueled by higher revenue from international data and the increasing demand for data center services, reflecting TM’s role in strengthening Malaysia as a regional digital hub.
Financial Health: Balance Sheet and Cash Flow Insights
Beyond the income statement, the balance sheet and cash flow statement offer crucial insights into TM’s financial health and liquidity.
Statement of Financial Position
| Metric | As at 31/03/2025 (RM Million) | As at 31/12/2024 (RM Million) |
|---|---|---|
| Total Equity | 9,956.8 | 10,265.9 |
| Total Borrowings | 3,476.1 | 3,490.9 |
| Cash and Bank Balances | 2,160.2 | 3,096.2 |
Total equity saw a slight reduction, primarily due to significant dividend payments during the quarter. Total borrowings remained relatively stable. A notable change is the decrease in cash and bank balances from RM3,096.2 million at the end of December 2024 to RM2,160.2 million at the end of March 2025, which correlates with the substantial dividend outflows.
Cash Flow Statement
Operating Cash Flow (Q1 2025)
RM 113.0 million
Operating Cash Flow (Q1 2024)
RM 568.6 million
Cash flows from operating activities experienced a significant reduction, dropping from RM568.6 million in Q1 2024 to RM113.0 million in Q1 2025. This was mainly due to higher payments to suppliers and employees. Cash flows used in investing activities remained relatively stable, while cash flows used in financing activities increased substantially to RM844.1 million (from RM835.5 million in Q1 2024), largely due to the payment of the 2nd interim and special single-tier dividends for FY2024 totaling RM710.0 million.
Risks and Prospects: Navigating a Dynamic Environment
TM’s outlook for the current financial year acknowledges both opportunities and challenges within the broader economic and industry landscape.
Economic Backdrop
The Malaysian economy expanded by 4.4% in Q1 2025, supported by robust domestic demand and a healthy labor market. Inflation remained stable at 1.5%, with the Overnight Policy Rate (OPR) holding steady at 3.0%. However, the report notes potential downward revisions due to uncertainties from recent U.S. tariff actions, highlighting the impact of global events on local markets.
Business Outlook and Strategic Focus
TM enters 2025 from a position of strength, built on a resilient business model. Despite rising competition and shifting cost dynamics, the Group remains committed to operational discipline and strategic clarity. Their strategy is centered on:
- Strengthening its core: Ensuring robust foundational services.
- Scaling enterprise and digital services: Expanding into high-growth areas.
- Enhancing cost efficiency: Optimizing operations to improve profitability.
Each business segment plays a crucial role in this ambition:
- B2C: Continues to push digital convergence for homes and MSMEs, leveraging its unique position as Malaysia’s only quad-play provider (broadband, mobile, content, voice). The focus is on enhancing customer experience through AI-driven predictive maintenance and personalized support.
- B2B: Sustains momentum in the enterprise and public sector with enterprise-grade connectivity, private 5G, cybersecurity, and smart services. As the National Cloud Provider, TM is pivotal in driving digital transformation with secure, sovereign, and scalable cloud infrastructure.
- C2C: Aims to strengthen Malaysia’s position as a regional digital hub through AI-ready data centers, edge facilities, and submarine cables. The “GPU-as-a-Service” offering is gaining traction, and C2C is actively supporting licensed service providers with robust 5G and fiber backhaul, including a recent agreement with U Mobile Sdn Bhd related to the Government’s 5G Dual Network initiative.
Despite some near-term headwinds, TM maintains a confident outlook, driven by disciplined execution, strategic investments, and a forward-looking approach to value creation.
Summary and
Telekom Malaysia’s Q1 2025 report showcases a company actively navigating a complex and competitive telecommunications landscape. While operating revenue saw a modest increase, the decline in PATAMI and operating profit highlights the pressures from rising costs, including 5G access and device expenses, coupled with unfavorable foreign exchange movements. The significant dividend payments for FY2024 also impacted the cash position.
However, the segmental analysis reveals strategic growth areas. The C2C segment continues to be a strong performer, driven by international data and data center demand, reinforcing Malaysia’s digital hub aspirations. The B2B segment, despite a slight revenue dip, demonstrates promising growth in “Beyond Connectivity” solutions, showcasing TM’s successful diversification into higher-value digital services. The B2C segment faces competitive pressures, but efforts to enhance customer experience and leverage its quad-play advantage are underway.
TM’s management has a clear strategy focused on strengthening its core business, expanding into enterprise and digital services, and improving cost efficiency. Their commitment to supporting the national 5G agenda and developing AI-ready infrastructure positions them well for future opportunities. The Malaysian economic environment, while stable, presents some global uncertainties that TM will need to manage.
Key points to consider from this report include:
- Moderate revenue growth despite a challenging environment.
- Impact on profitability from higher operating costs and foreign exchange.
- Strong performance in the Carrier-to-Carrier segment, driven by data centers and international data.
- Promising “Beyond Connectivity” growth within the Business-to-Business segment.
- Strategic focus on digital transformation, 5G, and AI infrastructure.
- Significant cash outflow due to dividend payments in the quarter.
It is important to note that this analysis is for informational purposes only and does not constitute a recommendation to buy or sell any securities. Investors should conduct their own due diligence and consult with a qualified financial advisor before making any investment decisions.
What are your thoughts on TM’s performance this quarter? Do you believe their strategic initiatives in B2B and C2C will be enough to offset the pressures in B2C and manage rising costs in the long run? Share your insights in the comments below!
