Telekom Malaysia Berhad

FY2025 revenue increased 1.4% year on year. Underlying EBIT increased 3% year on year and underlying PATAMI improved 10% year on year. Reported EBIT was RM 2 billion, while the company also referenced underlying EBIT of RM 2.47 billion for FY2025. Capex was RM 1.9 billion, or 16.1% of revenue, and free cash flow was circa RM 1.6 billion; cash and cash equivalents ended at RM 2.5 billion versus RM 3 billion at FY2024. The board declared a total dividend of RM 0.31 per share, made up of RM 0.27 plus a RM 0.04 special dividend. For 2026, TM guided for low-single-digit revenue growth, EBIT at a similar level to 2025, and capex of 18% to 20% of revenue. Management said the 2026 EBIT guide is based on reported EBIT and includes expected similar voluntary separation requests and the 5G-related provisions discussed on the call.

The CEO framed FY2025 as a year of continued execution against TM’s digital transformation plan, highlighting progress in B2C convergence, B2B digital solutions, and C2C infrastructure. He pointed to Unifi TV 2.0 adoption, stronger enterprise partnerships, and data center and AI-related capacity expansion as signs of momentum. His tone was confident but measured, emphasizing disciplined capital allocation, sustainable dividends, and a transition from the ‘defend and build’ phase to the ‘grow and replicate’ phase under PWR2030.

The CFO said reported earnings were affected by voluntary separation requests, FX movements, and selected nonrecurring items, but underlying performance was stronger. He cited underlying EBIT up 3% and underlying PATAMI up 10%, with revenue up 1.4% year on year. He also noted that manpower costs rose 8% year on year due to the separation program and incentive differences, headcount fell by a mid-single-digit percentage, direct costs rose 14%, and operating costs fell 2%. On cash and capital allocation, he said free cash flow was circa RM 1.6 billion, capex was RM 1.9 billion, and the balance sheet remained strong with sufficient headroom to fund growth and dividends.

Analysts focused heavily on the gap between reported and underlying earnings, asking about the RM 325 million in normalizing items, D&A volatility, and why 2026 EBIT guidance was flat despite revenue growth. Management said the normalizing items mainly reflected separation costs and about RM 30 million of FX loss for the quarter, while D&A moved because of asset cleanup and useful-life reviews, with the Q3 run rate suggested as the better baseline. They also clarified that 2026 guidance is on a reported basis and includes expected VSS-related costs and the 5G access-related provision, while the underlying EBIT view should be similar to FY2025’s underlying level. Several questions centered on the DNB-to-U Mobile transition, where management said there should be no penalty because TM is exercising contractual rights, there is a minimum capacity commitment under the new MOCN arrangement, and benefits are expected in the near term.