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TM International Berhad (TMI)-Bursa Announcement On Headline KPIs

Back 22 May 2008
General Announcement
Reference No TI-080522-37916

Submitting Merchant Bank
:
 N/A
Company Name
:
 TM INTERNATIONAL BERHAD
Stock Name
:
 TMI
Date Announced
:
 22/05/2008


Type
:
 Announcement
Subject
:
TM International Berhad (TMI)-Bursa Announcement on Headline KPIs

Contents
:
TM International Berhad ("TMI") wishes to announce its FY2008 headline Key Performance Indicators ("KPIs").

These headline KPIs have been set and agreed upon by the Board of Directors and management of TMI on 22 May 2008 as part of the broader KPI framework that TMI has in place, as prescribed under the Government-Linked Company ("GLC") Transformation program, and is disclosed on a voluntary basis.

Announcement Details :

 

The headline KPIs represent the main corporate targets set by TMI for the year and should not be construed as being forecasts. In this respect please note the following:

  • These headline KPIs are targets or aspirations set by the company as a transparent performance management practice. These headlines shall not be construed as either forecasts, projections or estimates of the company or representations of any future performance, occurrence or matter as the headlines are merely a set of targets/aspirations of future performance aligned to the company's strategy and which have been derived on the assumption that the Group shall operate under the current business environment.

Major challenges in meeting the headline KPIs will include the followings:

  1. Increased competition in the mobile market in Malaysia, Indonesia, Sri Lanka, Bangladesh and Cambodia.
  2. Concentration of most of our Group's business activities is in the South and Southeast Asian region, and many of TMI's operating companies and investments are located in emerging market countries in this region. As a result, the Group's operating revenues and results of operations as well as future growth depend, to a large extent, on the growth of these economies as well as on the political and social developments in these countries. 
  3. Currency fluctuations, liquidity shortages, and higher interest rates would also materially and adversely affect the economies of many countries in the Asia-Pacific region in general, and in Southeast Asia in particular.
  4. Laws and regulations, particularly fiscal policies affecting the economy as a whole and the telecommunications sector specifically, in these emerging markets also tend to be evolving and changing compared to mature markets. The Group may be adversely affected by any such change relating to telecommunications operators, licensing and services.
     

FY2008 Headline KPIs

Headline KPIs

FY 2008 KPI

1. Revenue Growth

16%

2. Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) Margin

42%

3. Return on Equity (ROE)*

14%

*ROE is computed as PATAMI / Average Capital & Reserves Attributable to Equity Holders of the Company

  • Revenue growth in 2008 will be largely driven from the Mobile operations in Malaysia, Indonesia and Sri Lanka.
  • A lower EBITDA margin is expected in 2008 mainly due to higher cost of operations. This is contributed by higher operating costs in all markets with efforts to improve network and service quality.
  • In investing for future growth, a ROE of 14% is expected after taking into account the following items:
  • Higher depreciation and finance cost expected from the increased capital expenditure ("capex") and financing for coverage and capacity expansion in the international mobile operations. The Group's total planned capex for 2008 is about RM4.6 billion as compared to RM4.4 billion capex spent in 2007. The capex will be funded by internally-generated funds and external borrowings by the respective subsidiary companies.

Moving Forward

The telecommunications industry will remain challenging and competitive in 2008 with continued offerings of innovative, attractive and competitive packages by industry players. The Group will embark on its twin engines of growth strategy, whereby it will first seek to unlock the value in its existing portfolio but also complement it with additional assets on an opportunistic basis. In addition to nurturing its existing OpCos, the Group will ensure the sharing of best practice and processes while introducing diversity in the organization whereby some of the best talent from the OpCos will be working at the holding company level and vice versa.

The Group's investment strategy remains to look at emerging markets, particularly with high growth potential, closer to home.