RM100mil office space savings forecast for TM

PETALING JAYA: Telekom Malaysia Bhd’s Fiscal 2022 (FY22) First Quarter Results (TM) are expected to be “seasonally weaker,” with revenue likely down about 6% to 10% quarter over quarter, according to RHB Research.

However, the research firm says the telecommunications company remained its preferred sector choice.

“Its stronger revenue and earnings outlook remains intact, and we see opportunity for further operating expense savings in FY23, while competition from retail fiber should be manageable. , in our view – cushioned, in part, by its expanding wholesale business,” he said in a note to clients yesterday.

Optimizing its office space will see TM transfer most of its operations from Menara TM to TM Annexe and Cyberjaya by the end of 2022.

This could result in savings of around RM100 million in rental and utility costs per year. In addition, management also highlighted additional procurement savings and reduction in personnel costs through labor optimization, RHB Research added. The Internet and wholesale trade remain the strengths of the group.

Meanwhile, TM’s new digital unit, Credence, has been positioned as an independent company with a mandate to grow through mergers and acquisitions.

“We see complementary synergies between Credence and TM One, with the former devoid of legacy runtime-type issues,” the research firm said. He maintained a “buy” call on the stock with a target price of RM7.65.