Telekom Malaysia said Thursday its net profit in the first quarter plunged 95 percent due to the de-merger of its mobile unit and on foreign exchange losses.
Malaysia's largest fixed-line telephone operator said its net profit for the three-month period to March 31 fell to 27.7 million ringgit (7.9 million dollars) from 519.7 million a year earlier.
Telekom said it expected the outlook to "remain challenging" for the rest of the year with the decline in voice revenue to continue, but growth in internet broadband services was expected to remain strong.
"The introduction of new wireless broadband technologies such as HSDPA and WiMAX is expected to increase the demand for broadband," the company was quoted as saying by Dow Jones Newswires.
Telekom said it expected to suffer higher exchange losses on foreign currency borrowings of 175.5 million ringgit, compared with a gain of 118.8 million ringgit in the same quarter in 2008.
Revenue rose to 2.11 billion ringgit from 2.01 billion.
Telekom had earlier set a revenue growth target of between 1.0 percent and 2.5 percent for 2009, and expects a gross profit margin of between 30 percent and 35 percent from 2009 to 2011.