TM 4Q07

Comment on Results

Net recurring profits in 4Q07 was RM560m (-15%QoQ, +51%YoY) bringing FY07 to RM2.17bn (+27%YoY). Celcom and overseaswireless (particularly XL) were the bright spots in 4Q07 showing strong sequential growth. Fixed line business disappointed somewhat on higher costs.

Celcom buoyed by improving margins – Wireless subsidiary Celcom posted 4Q07 net profits of RM300m (+14%QoQ, 42%YoY), with FY07 slightly ahead of Citi's est. Subscriber net adds picked up pace in 4Q07 at 473k (+46%QoQ) bringing FY07 to 1.1m . EBITDA margin was 45.3% in 4Q07 (+49 bps QoQ,+278 bps YoY) on lower bad debt and network expenses.


Overseas business lifted by XL – Indon. wireless subs. Excelcomindo (XL) the key bright spot in the TM's overseas stable, with strong subscriber growth,healthy demand elasticity lifting revenues. Sri Lankan subs. Dialog saw surgingcosts due to the pay TV and broadband rollout. TMIB continues to struggle. Fixed line hurt by higher costs – Stable 4Q07 fixed line rev. offset by a surge in costs with normalized EBITDA margins falling to 39% (vs. 44% in 3Q07 and41% in 4Q06). 4Q07 net profits fell to RM243m (-35%QoQ,-23%YoY).