Business

Published: Thursday February 26, 2009 MYT 8:07:00 PM

TMI earnings affected by forex loss, higher finance cost


KUALA LUMPUR: TM International Bhd(TMI), dragged by foreign exchange (forex) loss, reported a net loss of RM515.25mil for the fourth quarter ended Dec 31, 2008 compared to a net profit of RM519.92mil in the previous year’s corresponding period.

The telecommunication company (telco) has proposed a renounceable rights issue to raise gross proceeds of some RM5.25bil to de-leverage its balance sheet.

In a filing to Bursa Malaysia yesterday, the company said forex loss amounted to RM472.3mil during the quarter under review. The weaker earnings was also due to higher finance costs, negative contribution from subsidiary Dialog Telekom plc of Sri Lanka and share of loss from its Indian associate, Spice Communications Ltd.

Revenue for the fourth quarter fell 12.2% to RM2.42bil from RM2.75bil a year ago due to adverse forex impact on the translated results of its Indonesian subsidiary, PT Excelcomindo Pratama tbk (XL), which led to lower contribution. If based on constant currency, the group’s fourth quarter revenue would have been 10.8% higher year-on-year.

Its Malaysian unit, Celcom (M) Bhd contributed 60.5% of revenue during the fourth quarter compared with 48.2% in the same quarter of 2007. XL’s contribution, meanwhile, was reduced to 16.9% from 34.3% a year ago.

Based on the respective local currencies, all subsidiaries, with the exception of Dialog, recorded growth in the fourth quarter. Dialog’s revenue was pulled down by tariff revision, which it had to make to stay competitive in the market.

For year ended Dec 31, 2008 (FY08), TMI’s net profit tumbled by 72% to RM498mil against RM1.78bil a year ago although revenue was up by 13% to RM11.35bil from RM10bil previously.

The telecommunication company said the FY07 results had included gain on disposal of Dialog shares amounting to RM234.8mil and gain on Spice listing of RM71.3mil.

It added that the fluctuation of the ringgit against local currencies of its overseas operations had unfavourably affected its translated revenue.

“At constant currency, the Group revenue for the year grew by 20.3% year-on-year,” it added.

Finance cost had increased by RM397.5mil, or 83%, mainly driven by parent Telekom Malaysia Bhd’s bridging loans as well as financing cost of RM275.3mil to buy Idea Cellular Ltd of India.

The performance of Idea, however, was not included in the current financial results.

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