universiti Malaysia sabahENTREPRENEURIAL finance

GROUP ASSIGNMENT TOPIC:

TELECOM MALAYSIA BERHAD

LECTURE NAME: MADAM AINIE AUCASA

GROUP NAME: PELANGI SDN.BHD

Bil. Name Matrik no.1 KHUZAIMAH BINTI MOHD

NURUNGBB11110242

2 SITTI MUNIRAH BINTI ABD MALIK

BB11160816

3 MOHD HAFIZ BIN MAKSUD BB111103274 BAZILA BINTI BASARUM BB11110070

INTRODUCTION OF COMPANY BACKGROUND

Telekom Malaysia Berhad (TM) is engaged in the establishment, maintenance

and provision of telecommunications and related services. TM operates in four

segments: Retail Business, which provides a range of telecommunications

services and communications solutions to small and medium businesses, as well

as corporate and government customers except for consumer business, which

provides only voice and Internet and multimedia services; Wholesale Business,

which provides a range of telecommunications services delivered over its

networks to other licensed network operators; Global Business, which provides

inbound and outbound services for a range of telecommunications, and Shared

Services/Other, which include shared services division, all business factions

divisions and subsidies that do not fall under above line of business. On

September 27, 2011, it launched TM SmartMap. On November 20, 2011, TM

launched UniFi. On August 26, 2011, TM disposed 51.0% interest in Telekom

Smart School Sdn Bhd.

TM vision is "To be Malaysia’s leading new generation communications provider,

embracing customer needs through innovation and execution excellence" and to

achieve their vision their have same mission that is their determined to do the

following :

1. Strive towards customer service excellence and operational efficiency

2. Enrich customer lifestyle and experience by providing innovative new

generation services

3. Improve the performance of our business customers by providing high

value information and communication solutions

4. Deliver value for stakeholders by generating shareholder value and

supporting Malaysia’s growth and development

SWOT ANALYSIS

1. Strength:

Single company did not have any competitor that has same system,

product or serves like them.

Coverage is doing big or wide. Available in all place in Malaysia and

Asia as well

Have own loyalty of their product and services

2. Weakness:

TM has low protection that cause hacker easier to hack the line or

using it without being detected by the owner. This is especially the

Wi-Fi/internet line.

Using bill format that have cause many problem and difficulties to

the user because their lack or slow of updating the new bill to the

user.

Installation system or process is so difficult and have many

procedures.

Modem. Cannot be change or move to another place, need to stick

on consistent place because of plug and wire.

3. Opportunity:

Have big loyalty from their user.

Always provided satisfied system, network and services to their

customers. network is available in all place inside Malaysia

and Asia

There have a creativity and innovative that always provided

competitive environment

Stick network, not like another modem or broadband that need to

stick in on place that only has line or network.

4. Threat

Have new company that always make an improvement and

differences to challenges TM company

Security system is so weak and always be a issue that difficult to

solve in TM company.

PAST FINANCIAL PERFORMANCE

Telekom Malaysia Income Statement from Year 2009 until 2012

Currency inMillions of Malaysian Ringgits

As of: Dec 312009RestatedMYR

Dec 312010ReclassifiedMYR

Dec 312011RestatedMYR

Dec 312012MYR

Revenues 8,608.0 8,791.0 9,150.7 9,993.5

TOTAL REVENUES 8,608.0 8,791.0 9,150.7 9,993.5

Cost Of Goods Sold 5,237.0 5,311.7 5,427.5 6,149.6

GROSS PROFIT 3,371.0 3,479.3 3,723.2 3,843.9

Selling General & Admin Expenses, Total 516.2 697.3 752.0 777.7

Depreciation & Amortization, Total 2,000.7 1,924.0 2,030.4 2,016.0

Other Operating Expenses -97.1 -121.1 -82.2 -128.2

OTHER OPERATING EXPENSES, TOTAL 2,419.8 2,500.2 2,700.2 2,665.5

OPERATING INCOME 951.2 979.1 1,023.0 1,178.4

Interest Expense -338.4 -365.2 -318.2 -331.5

Interest And Investment Income 118.0 130.3 150.9 140.9

Other Non-Operating Expenses, Total 109.8 303.6 -58.5 74.3

Other Non-Operating Income (Expenses) 68.7 -- -- --

Merger & Restructuring Charges -- -10.6 -5.7 --

Gain (Loss) On Sale Of Investments 54.5 373.3 286.5 0.3

Gain (Loss) On Sale Of Assets 82.9 4.0 9.4 19.1

Other Unusual Items, Total -56.4 -54.3 -86.2 -11.9

EBT, INCLUDING UNUSUAL ITEMS 921.6 1,360.2 1,001.2 1,069.6

Income Tax Expense 248.3 115.2 -235.9 -236.3

Minority Interest In Earnings -30.3 -38.5 -46.1 -42.2

Earnings From Continuing Operations 673.3 1,245.0 1,237.1 1,305.9

NET INCOME 643.0 1,206.5 1,191.0 1,263.7

NET INCOME TO COMMON INCLUDING EXTRA ITEMS 643.0 1,206.5 1,191.0 1,263.7

NET INCOME TO COMMON EXCLUDING EXTRA ITEMS 643.0 1,206.5 1,191.0 1,263.7

Telekom Cash Flow from Year 2009 until 2012

Currency inMillions of Malaysian Ringgits

As of: Dec 312009RestatedMYR

Dec 312010ReclassifiedMYR

Dec 312011RestatedMYR

Dec 312012MYR

NET INCOME 643.0 1,206.5 1,191.0 1,263.7

DEPRECIATION & AMORTIZATION, TOTAL 2,000.7 1,924.0 2,030.4 2,016.0

Other Operating Activities 412.3 -157.1 -190.7 -556.0

CASH FROM OPERATIONS 3,056.0 2,973.4 3,030.7 2,723.7

Capital Expenditure -2,516.2 -2,864.3 -2,735.0 -2,547.9

Sale Of Property, Plant, And Equipment 19.0 37.3 17.6 21.3

Cash Acquisitions -412.3 -- -- --

Divestitures -- -- -2.3 --

CASH FROM INVESTING 2,546.4 -1,446.9 -1,338.0 -2,227.9

Long-Term Debt Issued 180.0 -- 1,268.3 1,479.4

TOTAL DEBT ISSUED 180.0 -- 1,268.3 1,479.4

Long Term Debt Repaid -452.2 -860.9 -496.4 -635.6

TOTAL DEBT REPAID -452.2 -860.9 -496.4 -635.6

Issuance Of Common Stock 229.5 50.7 34.8 --

Repurchase Of Common Stock -- -- -- -1,073.2

Common Dividends Paid -731.3 -693.8 -702.1 -701.2

TOTAL DIVIDEND PAID -731.3 -693.8 -702.1 -701.2

Other Financing Activities 30.8 -30.2 -29.7 -39.9

CASH FROM FINANCING -4,205.9 -1,534.2 -962.5 -970.5

Foreign Exchange Rate Adjustments -1.0 5.5 -5.6 0.4

NET CHANGE IN CASH 1,395.5 -2.2 724.6 -474.3

Telekom Malaysia Balanced Sheet from Year 2009 until 2012

Currency inMillions of Malaysian Ringgits

As of: Dec 312009RestatedMYR

Dec 312010ReclassifiedMYR

Dec 312011RestatedMYR

Dec 312012MYR

AssetsCash And Equivalents 3,490.7 3,488.5 4,213.0 3,738.7Short-Term Investments 294.7 838.1 418.1 500.6Trading Asset Securities -- 21.5 20.1 19.1TOTAL CASH AND SHORT TERM INVESTMENTS 3,785.4 4,348.1 4,651.2 4,258.4Accounts Receivable 1,781.0 1,797.0 1,854.8 1,740.9Notes Receivable 11.5 6.5 4.9 4.7Other Receivables 376.0 401.5 343.2 314.3TOTAL RECEIVABLES 2,168.5 2,205.0 2,202.9 2,059.9Inventory 110.6 174.0 325.3 235.3Prepaid Expenses 115.5 124.3 120.3 147.1Other Current Assets -- 87.1 106.1 108.1TOTAL CURRENT ASSETS 6,180.0 6,938.5 7,405.8 6,808.8Gross Property Plant And Equipment 44,627.1 46,584.1 48,182.8 49,723.6Accumulated Depreciation -32,222.8 -33,472.0 -34,061.1 -35,086.0NET PROPERTY PLANT AND EQUIPMENT 12,404.3 13,112.1 14,121.7 14,637.6Goodwill 309.6 309.6 309.6 309.6Long-Term Investments 761.6 118.7 171.6 143.0Loans Receivable, Long Term 108.9 55.2 40.9 34.5Deferred Tax Assets, Long Term 10.6 86.7 21.7 18.6Other Intangibles 3.8 2.7 11.3 12.5Other Long-Term Assets 163.7 156.5 169.7 231.3TOTAL ASSETS 19,942.5 20,780.0 22,252.3 22,195.9

LIABILITIES & EQUITYAccounts Payable 2,020.7 2,403.2 2,302.8 2,219.6Accrued Expenses 245.8 485.5 485.2 398.6Current Portion Of Long-Term Debt/Capital Lease 916.6 26.0 7.7 2,010.2Current Portion Of Capital Lease Obligations 4.1 3.4 3.6 3.8Current Income Taxes Payable 14.1 43.8 81.9 124.7Other Current Liabilities, Total 1,173.4 1,232.9 1,216.3 1,330.2Unearned Revenue, Current 70.4 98.1 535.4 538.9TOTAL CURRENT LIABILITIES 4,441.0 4,289.5 4,629.3 6,622.2Long-Term Debt 5,735.4 5,453.0 6,348.1 5,105.4Capital Leases 61.5 58.2 54.6 50.7Minority Interest 142.5 150.8 162.9 165.2

Unearned Revenue, Non-Current 985.9 1,432.1 2,072.7 2,129.4Deferred Tax Liability Non-Current 1,588.7 1,664.2 1,541.8 1,202.6Other Non-Current Liabilities -- 22.8 18.9 25.6TOTAL LIABILITIES 12,812.5 12,919.8 14,665.4 15,135.9Common Stock 3,543.5 3,568.1 3,577.4 2,504.2Additional Paid In Capital 1,011.8 1,055.1 43.2 43.2Retained Earnings 2,222.2 2,719.4 3,627.7 4,190.2Comprehensive Income And Other 210.0 366.8 175.7 157.2TOTAL COMMON EQUITY 6,987.5 7,709.4 7,424.0 6,894.8TOTAL EQUITY 7,130.0 7,860.2 7,586.9 7,060.0TOTAL LIABILITIES AND EQUITY 19,942.5 20,780.0 22,252.3 22,195.9

Ratio Analysis of Telekom Malaysia Financial Performance over 2009- 2012.

2009 2010 2011 2012

Liquidity ratios

Current ratio

(average current assets)

(average current liabilities)

1.503 1.608 1.263 -

Quick ratio

(average current assets- average inventories)

(average current liabilities)

1.47 1.55 1.21 -

Conversion period ratios

Inventory to sale conversion period

Average inventories

(Cost of good sold/ 365)

9.92 17.16 18.85 -

Purchase to payment conversion period

(Average payables + average acured liabilities)

(cost of good sold/ 365)

179.83 195.08 181.58 -

Leverage Ratios

Total debt to total

assets

(average total debt)

(average total assets)

- - - -

FUTURE OUTLOOK IN THE INDUSTRY

The telecommunication sector will play a pivotal role in Malaysia information and

communication technology (ICT) transformation, with rapid development in

technology and connectivity being the key driving growth. According to statistics

from International Investors, the juxtaposition of global ICT trends with the

unique position of the Malaysia ICT industry is creating distinct opportunities in

this industry for players.

Based on the future of TELEKOM MALAYSIA we can see, TM is the largest and

most comprehensive provider of communication services in Malaysia as well as

one of Asia’s primary players in the Telecommunications Industry. TM runs a best

in class network infrastructure that spans across the globe. They offer extensive

range of products and services comprising of data, bandwidth and voice that

accommodates your unique needs and optimize the turnovers.

In the current economy scenario of scarce financial resources, it was

unlikely that PCN services can achieves the same level of coverage as Mobikom

and Celcom’s AMPS service in the medium term. Telekom Malaysia therefore, felt

that it would have continued to play a significant in the Malaysian cellular

industry.

In Malaysia the telecommunications segment is characterised by the

presence of Telekom Malaysia Bhd (TM) as the incumbent fixed line and the

largest broadband and enterprise services player. Currently there are four

cellular operators in Malaysia namely CELCOM bhd, DIGI.com bhd (Digi), Maxis

Bhd (Maxis) and U mobile sdn bhd (U mobile). Apart from these cellular

operators, there are four WiMax operators.

Telecommunication marketplace in Asia Pasific is very dynamic and highly

competitive with increasing number of players and evolving landscape. Revenue

from traditional business like voice and short message services (SMS) continues

to decline. Thus the decline in core revenue has led operators to explore and

invest more in broadband and data services. The key strategy for the operators

is to monetise the data effectively.

Over the year TELEKOM MALAYSIA has evolved exponentially and reaches

a mobile penetration is only about 21 precent at the end of 2011. Having a

competitive market structure for internet services is essential to providing that

service at a competitive price. But with only two market players so far, the

Malaysian Internet is still far from any sort of competitive equilibrium.

RECOMMENDATIONS:

1. Based on continues:

Continue production of new, more sophisticated systems and meets

the requirements and scope of the consumer. Use the sophistication

available.

2. Base on Harvest:

Foster cooperation with other companies for the production of

electronic communication devices (Modern, Phone) are more

sophisticated and cutting-edge and high resilience.

3. Base on Exit:

Try to find a solution for the problems in question the TM. Especially

the security system problem that is often raised and disputed. This

problem can be solved to produce or attract more trust and

confidence in TM.

4. Based on Regroup:

Augment the monitoring of existing branches all over the place to

ensure the smooth and effective system. In addition, holding

meetings with senior officials to solve the problems that arise and

discuss troubleshooting steps.

REFERENCES

S.Janet and B.Richard. (2011). Entrepreneurial Finance: Strategy, Valuation, and

Deal Structure.

Steven Rogers. (2008). Entrepreneurial Finance: Finance and Business Strategies

for the Serious Entrepreneur.

http://www.theborneopost.com/2012/06/17/a-calculated-game-plan/#ixzz2SUvwc

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http://www.theborneopost.com/2012/06/17/a-calculated-game-plan/#ixzz2SUu8V

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http://www.theborneopost.com/2012/06/17/a-calculated-game-plan/#ixzz2SUsKQ

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