Communications giant Telekom Malaysia today said its first half net profit rose 8.3 percent year-on-year to RM557.46 million because of lower taxation charges.

Its tax rate for the first half amounted to 31.0 percent as opposed to 39.0 percent in the same period last year, it said.

Telekom Malaysia said sales came in at RM5.29 million against RM4.78 billion previously, while pretax profit amounted to RM843.60 million, down from RM870.66 million.

Revenue rose 19.9 percent year-on-year in the second quarter and 10.7 percent in the first half despite declines in fixed-line sales of 4.1 percent and 2.2 percent respectively, it said.

Higher revenue

Telekom attributed the increased revenue mostly to higher contributions from cellular, data and non-telecommunications services.

The significant growth in cellular revenue was mainly due to consolidation of 2.5 months' results of newly acquired subsidiary company Celcom (Malaysia) Berhad, it added.

It noted pretax profit for the second quarter fell 2.0 percent and that for the first half declined 3.1 percent respectively mainly due to higher operating costs.

Telekom Malaysia said the costs were mainly attributable to depreciation of property, plant and equipment, as well as domestic and international payments.

The second quarter's revenue increased 26.2 percent quarter-on-quarter to RM2.95 billion due to higher revenue from all services except for other telecommunication services, it said.

Strategic initiatives

On its future prospects, Telekom said the world economy has yet to emerge fully from the setbacks of war, terrorism, unstable financial markets and the Sars epidemic, which adversely affected growth in 2003.

Despite the uncertainties, Telekom Malaysia was of the view that it has shown a satisfactory measure of resilience on strategic initiatives put in place to respond to changing trends in the communication industry.

"The acquisition of Celcom (a mobile operator in the first-half of 2003) has begun to contribute positively to the group's revenue and profitability," it said.

Telekom Malaysia Bhd said it would sustain current efforts to achieve operational efficiencies, as well as to strengthen its position in fixed-line, data, cellular and multimedia businesses and achieving satisfactory results for the year, barring unforeseen circumstances. - AFP