Assalamualaikum and a very good evening, everyone. Welcome to TM TM's 2026 First Half Analyst Briefing, hosted by our Managing Director and Group CEO, Dato' Amar Huzaimi, together with our Group CFO, Encik Ahmad Fairus.

I'm Delano from TM's IR team, and if you are in our distribution list, you would have received a copy of the analyst briefing presented to you by email earlier. The slides are also available on our IR website under Quarterly Results and will be shown during the session.

Before we begin, I would kindly remind everyone to keep your microphones muted. We will open the floor for Q&A session after the presentation.

Without further ado, I would like to hand over the briefing to Dato' Amar. Over to you, Chief.

Thanks Delano. Assalamualaikum and a very good evening.

Thank you everyone for making the time to attend this briefing. As usual, I will start with an overview of our latest highlight and performance before handing the session over to our Group CFO, Fairus, to elaborate on the financial and operational details.

I will be back at the end of the presentation with some concluding remarks before we proceed with the Q&A session. Let me begin by thanking football fans across Malaysia for their tremendous support during the recent FIFA World Cup 2026.

We were proud to have jointly brought the excitement of the world's most anticipated sporting event to Malaysians. For TM, this went beyond broadcasting a major sporting event, as it provided an opportunity to enrich our customers' experience.

The encouraging response significantly increased the visibility of Unifi TV, strengthening its position as a trusted platform for premium live content and reinforced the value of our broader convergence portfolio. Turning to B2C, our focus remains on strengthening Unifi's convergence proposition and delivering greater value to customers.

Through our latest Unifi Home Pro campaign, customers can upgrade to faster internet at a more affordable price while accessing a broader range of converged services including premium content and mobile, all within one ecosystem. We are also seeing encouraging traction in smart home AI solutions, particularly the smart camera introduced under Unifi Home Shield earlier this year.

These solution provide customers with greater security and peace of mind at home, while extending Unifi's proposition beyond connectivity and creating further growth opportunities within our existing broadband base. For B2B, we continue to build momentum across both core and new core portfolios.

Our core connectivity growth is supported by stronger adoption of enterprise solutions, while our new core portfolios are progressing across cloud, cybersecurity, and digital solutions. As demand for secure, nationally hosted digital services grows, TM One is well positioned to capture these opportunities across enterprise and the public sector.

Our strategic collaboration with TNB further opens up opportunities to apply these capabilities into smarter and a more sustainable solutions, including the application of AI. We will soon launch the TM Cyber Defense Centre, or CYDEC, which will further strengthen our ability to address evolving cyber threats, expanding cybersecurity portfolio, and contribute to Malaysia's broader cyber resilience agenda.

For C2C, we are strengthening our international connectivity and data center ecosystem to support growing demand for AI, cloud, and data-intensive workloads. IPDC Block 2 has been fully taken up, reflecting healthy demand for data center capacity.

We also completed the landing of the Asia Link Cable in Sedili, Johor, adding another strategic route into TM international connectivity portfolios. Domestically, TM Global continues to reinforce its role as a key 5G backhaul provider with more than 9,500 sites deployed, supporting over 80% of coverage nationwide.

Together, these initiatives reinforce TM's role as the nation's digital ecosystem orchestrator, while advancing our Digital Powerhouse 2030 aspirations. We have now passed the midpoint of the year, and I am pleased to report that TM continues to sustain a positive revenue trajectory across all our customer segments.

This is driven by continued traction in our convergence offering, enterprise digital solutions, and regional digital infrastructure. Profitability for the first half reflected several non-recurring items that are specific to the period.

This includes the 127 million write-off of unutilized prepaid capacity under the current 5G MOCN agreement, which was recognized in the first quarter, and other one-off costs, including the FIFA World Cup 2026 broadcasting rights. The World Cup investment delivered the visibility and customer engagement I mentioned earlier.

The bold and strategic action taken during the period will strengthen TM's operating efficiency, competitiveness, and profitability in the long run. For the quarter under review, profitability improved sequentially, with both EBIT and PATAMI recording double-digit quarter-on-quarter growth.

Reflecting this performance, the board has declared a second interim dividend of 7 sen per share for the financial year of 2026. This brings our total dividend for first half 2026 to 13.5 sen per share, or equivalent to 75% of reported PATAMI, higher than the same period last year.

This is in line with our commitment to deliver optimal shareholder value, aligned to our enhanced dividend framework announced recently. We continue to balance disciplined capital management with investment targeted at our growth priorities, while sustainability remains integral to how we run and grow the business.

MSCI recent upgraded the TM ESG rating to AA from just a single A and has placed us in the leader category among global telecommunication peers, reinforcing our continued commitment to sustainable growth and long-term value creation. Overall, our second-quarter results highlight a clear path forward as we continue to improve the quality of our earnings, maintain disciplined execution across all customer segments, and deliver sustainable returns for all shareholders.

This brings us closer to our aspiration to become a digital powerhouse by 2030, while positioning Malaysia as the digital hub for the region. With that, let me now hand over to our Group Chief Financial Officer, Fairus, who will take you through the financial performance in greater detail.

Thank you, Dato'. Assalamualaikum and very good afternoon.

I will start with an overview of the group's revenue and underlying profitability to provide a clearer view of our operational performance. Revenue for the first half stood at RM5.9 billion, growing at 4.8% year-on-year and circa 1% quarter-on-quarter.

Top-line improvement was seen across all customer segments, reflecting effective execution and contribution across the group's key customer segment. Our underlying EBIT for the first half of the year stood at RM1.2 billion.

This exclude the one-off write-down of unutilized 5G MOCN capacity recognized during the previous quarter, as well as the group continued Prihatin initiative. Nevertheless, underlying PATAMI was up 7% against the same period last year at RM843 million on a lower net finance cost following further debt repayments during the year.

As Dato' Amar mentioned earlier, there were other one-off cost item during the period, including content cost for the World Cup broadcast. While this affecting reported profitability in the first half, they are temporary in nature.

On that basis, normalizing for this item give us a like-for-like underlying EBIT growth of circa 2% year-on-year. Let us now take a closer look at each of our business segment, beginning with our B2C, Unifi, in the next slide.

B2C delivered revenue growth of 5.2% year-on-year at RM2.9 billion, led by continued momentum in higher-value revenue streams, particularly from stronger adoptions of converge lifestyle devices and digital solutions. The Unifi broadband base held stable at 3.2 million despite the mature and competitive market, indicating a very effective campaign execution.

Smart home AI solutions continue to gain tractions and improve the overall value propositions. Our FIFA World Cup 2026 broadcast drove close to 400,000 additional Unifi TV app downloads, bringing cumulative download base to circa 1.5 million, giving us a wider base to monetize in the future.

All of the above have contributed to 4.8% improvement in ARPU at about RM132. The positive performance demonstrate the adaptability of our core connectivity business and our continued ability to deepen customer engagement through bundled broadband, mobile, content, and smart home offerings, reinforcing Unifi positions as the only Malaysia's convergence champion.

In Unifi Business serving MSMEs, we continue to expand relevant digital solutions to help businesses operate more efficiently, strengthen their security, and grow their business. Our cloud and cybersecurity solutions are seeing encouraging demand, improving the overall Unifi revenue mix.

The strategic priorities on the right continue to be the focus of B2C. As the market develops, we are increasing our focus on customer quality through expanded convergence offering, higher monetizations, and continued expansion of the B2C ecosystem.

Turning to business-to-business, we saw a steady progress in the first half with revenue improving circa 2% to RM1.36 billion. This is supported by stronger demand and execution across both government and enterprise segment.

For the government, growth was driven mainly cloud services for national digital initiatives, call center outsourcing for government agency, and including smart services solution for property management company alongside renewal of key cybersecurity projects. This was complemented by recurring connectivity demand and project renewals to support national strategic projects, reflecting the resilience of our core revenue base.

These wins indicate continued demand for cloud, digital, and cybersecurity solutions across the government sector. Enterprise demand remained healthy with major connectivity contract renewals and a new contract for data services in banking segment, alongside continued momentum in data center services.

We are also seeing encouraging progress in new core activities, including a notable mobile project secured with a national automotive player leveraging on our M2M, machine-to-machine, eSIM technology to provide seamless in-vehicle connectivity. We remain on track in transitioning to higher-value new core digital solution while maintaining our recurring core businesses.

Carrier-to-carrier revenue grew 7%, circa 7% year-on-year to RM1.6 billion, driven by sustained momentum across data center, international data, including our 5G backhaul services. Domestically, our mobile backhaul continued to scale.

We now supported more than 12,000 site, of which more than 80% are our 5G site. This strengthened our recurring revenue base while supporting the accelerated rollout of Malaysia's second 5G network and growing mobile data demand across Peninsular Malaysia, Sabah, and Sarawak.

In our fixed wholesale, our HSBA customers are upgrading their bandwidth requirement in line with the growing demand. Our international revenue grew by double digits and two things that drove it.

Firstly, our recurring revenue from OTT customer at IPDC, alongside sustained hyperscaler demand for international connectivity. Secondly, the regional expansions by hyperscaler also driving demand for cross-border connectivity through managed wavelength and high capacity data services, including our IEPL.

For your information, our IPDC Block 2 is now fully taken up, 100%, with our customer onboarding progressively throughout the year, reflecting healthy demand for our data center offerings. Meanwhile, our AI-ready data center, TM NexDC, remains on schedule to deliver scalable, AI-ready, and green infrastructure.

The Asia Link Cable has landed in Sedili, Johor, and is expected to be ready for service in the first half 2027, expanding our future international connectivity capacity to support the growing hyperscaler and cross-border data demand. Strategically, we are focused on strengthening Malaysia's position as the digital hub for the region, expanding domestic mobile backhaul, investing in submarine cable alongside cross-border terrestrial network in the ASEAN region, enabling higher cloud and AI-related workloads.

Now let's go over the summary of revenue breakdown in the first 6 months of 2026 against the same period last year. In the first half 2026, our product recorded positive performance with voice broadly stable.

Data revenue increased by circa 5% year-on-year, mainly from mobile backhaul rollout and higher international connectivity deals. This remain an important growth area for the group, particularly as the demand for network capacity, data traffic, and regional connectivity continues to increase.

Internet remained the group largest revenue contributor, accounting circa 40% of total revenue. On a year-on-year basis, our internet revenue increased by about RM20 million on additional 44,000 subscribers.

This reflects continued demand for our broadband services and the effectiveness of our acquisition and retention efforts. Other revenue category recorded strongest year-on-year growth of 22% with contributions from bundled service offering.

On a year-on-year basis, voice revenue remained broadly stable, consistent with the maturity of the product and businesses. Overall, the quarter reflects resilient demand across core connectivity businesses, complemented by continued growth in the high-value services such as mobile backhaul and international connectivity, further strengthen the quality and diversification of our revenue portfolio.

Turning to our cost performance, total cost came in at approximately RM5 billion, including depreciation and amortizations. Our cost-to-revenue ratio increased by 4 percentage point from 81% in the prior year, impacted by strategic initiative and this also include largely from our 5G capacity write-down recognized in the previous quarter.

Stripping this out, our underlying cost-to-revenue ratio is approximately 82% compared to the previous year. On a specific cost segment, our direct cost increased 20% year-on-year, mainly reflecting revenue-funded cost, including those supporting our convergence offering and international growth.

As for our manpower cost increased by circa 4% year-on-year, mainly reflecting our Prihatin-related costs during the period. On the infrastructure and customer operation increased about 24%, and we have been telling this couple of time due to our one-off RM127 million 5G MOCN write-down being the primary driver.

Excluding this, the overall cost is flat. With the transition to the second 5G network now completed, we expect to see a more efficient cost structure going forward.

Operational costs rose to circa 7%, reflecting comparative movements in the selected cost items. As for depreciation and amortization, increased modestly by 2%, mainly from data center expansion and other investment completed last year.

On a quarterly basis, the cost-to-revenue ratio improved by circa 3% 3 percentage point, and this reflects a normalized cost base following the prior-quarter's one-off items together with better operating leverage from sequential revenue growth. Let's move to the capex.

For the first half of the year, the group invested circa RM560 million, or 9% of our revenue, and the intensity rose sequentially as investment activity accelerated in the higher revenue project. More than 70% of our first-half investment went to revenue-generating growth investment while exceeding our hurdle rate, including fiber access and 5G backhaul, and building data centers, cloud infrastructure, and deploying submarine cable system.

We also spent some RM100 million for our network and infra modernizations. At 9%, we are tracking below full-year guidance and expect to catch up in second half of the year.

For the group cash flow and financial ratio, the group maintained a very health cash generation in the first half 2026 with operating cash flow circa RM710 million. Our free cash flow improved about 20% year-on-year to RM955 million, providing sufficient capacity to fund the expected capex in the second half of this year.

We ended the period with a healthy cash balance, providing sufficient flexibility to meet operating requirement and sustain our enhanced dividend distribution. Now let's take a closer look at the financial ratio.

Our balance sheets remain resilient with improvements recorded across all leverage indicator. Gross debt-to-EBITDA improved to 1 times from 1.2 times, and similarly, gross debt-to-equity strengthened to about 0.4 times.

The group also maintained a healthy liquidity position with a current ratio more than 1. Looking at our return metrics, the group recorded ROE circa 13.6%, ROA about 7%, and ROIC circa 11%.

ROIC continues to exceed our WACC, sustaining a positive spread, reinforcing our focus on value-accretive growth. Overall, our strong cash flow generation and healthy balance sheet provide the financial flexibility to execute our strategic priorities while delivering sustainable long-term value for our stakeholders.

That concludes the financials and operational highlights, Dato', and I will now hand back to you. Over to you, Dato'.

Thank you, Fairus. In summary, our first-half performance reflects healthy revenue momentum, with positive performance across all customer segments despite the challenging market environment.

Our revenue grew by 4.8% year-on-year, while underlying EBIT remained resilient at close to RM1.2 billion Malaysia. Growing and protecting our core business remains our priority, while we progressively advancing our new growth areas such as data center, cloud, cybersecurity, smart services, and also AI.

At the same time, we remain focused on disciplined execution, revenue quality, cost management, and capital allocations as we invest for the group long-term growth. As I announced earlier, reflecting our strong fundamentals, we have also declared a higher interim dividend, consistent with our enhanced dividend framework and our commitment towards delivering sustainable returns to shareholders.

Overall, TM maintains a positive outlook for the year and remains on track to deliver our 2026 market guidance. This reinforces TM role as the nation's digital orchestrator as we continue our journey towards becoming a digital powerhouse by 2030.

Before I conclude, allow me to also take this opportunity on behalf of TM to wish everyone Selamat Menyambut Hari Kebangsaan. As we celebrate the spirit of Merdeka, may we continue to progress together towards a more connected and digitally empowered Malaysia, building a future that is more inclusive for all.

With that, I thank you for your attention, and we shall now proceed to the Q&A session. Thank you.

Thank you Dato' Amar and Encik Fairus. We will now begin the Q&A session.

If you like to ask a question, we prefer if you use the raise hand function, and we will invite each one of you based on the order shown. The first question comes from Luis.

Go ahead, Luis, and unmute yourself.

Hi, good evening and thanks for hosting the call and congrats on the results. I just had three questions initially.

The first is on the cost side. I believe you said that 5G prepayment cost zero already in the second quarter, we should expect nothing in the second half.

Just wanted to verify that. On the Prihatin costs, could you give us a sense of how much it was second quarter versus first quarter, and whether you expect more in the second half?

The second question is if you could give us an update on the NexDC. I heard you say it was on schedule.

Just wanted to get a sense for when you will be able to disclose the interest in getting slots in the DC. The last question is on Streamyx.

I just want to confirm, has the brand already been shut down, and is there any opex savings as a result of that in this quarter or going forward? Thank you.

Sorry. Let me take the first question on 5G.

What was it? Just hold on.

I can hear echo. Anyway, in relation to 5G, yes, all of the write-off has been taken up in the first quarter, yeah?

There will be none on the second half, yeah? With respect to Prihatin, the cost for this second quarter versus first quarter, I think that was the question, right?

For this year, we would expect the take-up will not be as encouraging as last year due to the turn of event of the global situation and crisis as well. I think most of our warga is more I would say concerned about taking the package in this time of uncertainties.

We can expect that the Prihatin, although that the package is still available, yeah, and we will continue to also consider and review each request fairly to allow a much more comfortable transition. However, we will expect that it will not be as huge as what was requested for last year.

Luis, could you have to repeat your last questions?

Yes. The next question was on NexDC.

You mentioned it is on schedule. If you could give us the timeline for when you can start disclosing the level of interest for tenants in the DC.

The last question was on Streamyx, whether it's been shut down and whether you have cost savings from that.

For the NexDC, yes, it is on track. We expect to partially RFSI it on September 2026, yeah, at least approximately about more than about close to 20 MW, yeah, where the remaining will be made ready by first quarter 2027.

Okay. Hey, thanks, Fairus.

Just on the Streamyx?

For the Streamyx question, sorry Luis, I missed that question earlier. Largely, all the Streamyx customers has been migrated to Unifi.

The one remaining is very, very small number, which we will continue to migrate it to our fiber network.

Once they're all migrated, will you have substantial cost savings at all?

Yes, certainly there will be cost savings. However, it will not be very impactful because significant amount has been already migrated to the new network.

Great. Hey, thanks a lot.

All right. Thank you.

Thanks, Luis. Up next, we have Ranjan.

Go ahead, Ranjan, and unmute yourself.

Hi, good evening, management. Thank you so much for the presentation and the opportunity.

Two questions from my side, please. If I look at the internet revenues that you report by product, it's up RM5 million over the last year.

If you look at Unifi, it's up 73. Is it fair to assume that the remainder is coming from mobile and content, which is pay TV?

The second question is on your 5G wholesale costs. I understand with DNB you're not paying anymore.

Is that fully resolved? Because I think there were some questions whether there could be ongoing payments.

Second part of that question is have you started incurring the costs related to the second network? Thank you.

Let

let me just take up the question on 5G DNB whilst Fairus look up on the internet revenue as well. For the 5G DNB, yes, our migration has been on track, and we will be migrating to the new network by or rather subsequent to end of July already, yeah.

Secondly, the the cost of the new network will start once we have fully migrated, and we expect it to be in August this month.

We have fully migrated

by end of July last year. Last month.

Sorry.

Coming back to your questions, Ranjan, the internet revenue basically encompass of couple of things, as you rightly pointed. One is actually the connectivity, internet connectivity itself.

Number two is coming from our mobile, as well as content. I think the improvement is attributable to actually improve of number of subscriber that we have mentioned earlier, about 44 45,000.

Thank you.

Can I just have a quick follow-ups? If the internet revenues includes mobile and content, why is there a difference in the growth rates between when you report the revenues by product and by business segment, Unifi?

I was trying to understand that. On the 5G cost, DNB are fully migrated by July.

You're not seeing the full cost impact of the new network yet. Is that fair to understand?

Maybe I clarify first actually the first questions coming from you. Why you're asking the growth rates.

Just for your information, the internet does not represent retail or B2C alone, but is a combinations of B2C, B2B, and if actually any from C2C. There's a various growth rate amalgamated to become one actually product reports under the internet, yeah?

I hope that clarifies. Can you just repeat the last questions actually again, Ranjan?

On the 5G cost, from what I understand, you have fully migrated by the end of July to the new network, and you will incur the wholesale cost on the new network from August. I was trying to understand how the cost accounting works, because at what point do you stop accounting for costs for DNB, and when do you start accounting for the new costs for the new network?

I think as typical any contract management, we have completed and actually vacated the network as we announced on 31st of July, and that should stop actually the previous or the existing contract. Our new cost structure for 5G cost MOCN on the new network will start effectively 1st August, yeah?

That will carry on actually from August and onwards. Thank you.

Got it. Thank you.

Thanks, Ranjan. Up next, we have Foong.

Go ahead, Foong.

Hi, good evening. Thank you for so much for the call.

Two questions from me. Firstly on TM One, the revenue growth in the first half was 2%.

It looks like it's a decent number after many years of at least a few years of lackluster performance. Correct me if I'm wrong, the tone during the presentation sounded a bit more positive on TM One.

Are you more optimistic on the revenue growth outlook for TM One going forward? We used to see a fair bit of price pressure from contract renewals and all that.

Is that now you think behind us for TM One? That's question number one.

Then my second question, on the underlying EBIT, right, that you're showing in the presentation slide, I just wanted to clarify whether that number normalizes for everything including Prihatin charges, except for the World Cup content costs. Is that right?

Yep, those are my two questions. Thank you.

Let me take on the TM One, right? Yes, we are optimistic, and the growth is encouraging for TM One.

Generally, it's been contributed by two initiative on core where there are positive renewals on major contracts on the connectivity, and there are also new growth in the new core area, for example, cloud, cybersecurity, smart services among others, yeah. Thank you.

Foong, I'll take actually the the the questions on the underlying EBIT. There are three items as actually we provided there.

5G The The one that we have excluded as part of our underlying EBIT actually report reports, one is our 5G MOCN write-down, about RM127 million. Then we have foreign exchange losses on our operation, as well as Prihatin.

There are only three items. Yeah.

Thank you.

Okay. If I can follow up, Dato' Amar, you mentioned back on TM One, right?

Based on what you said, right, can we expect the revenue growth for TM One to now be firmly in the low to maybe even mid-single digit growth rate maybe into the second half or maybe into next year? Then back to Fairus, right?

Did I hear you correctly that if we were to exclude the World Cup content costs, the underlying EBIT for the first half will be up by 2%? Yep, those are my two follow-up questions.

Thank you, Foong. For the TM One again, yes, we are encouraged about the growth.

However, as the landscape, the demand, or the market that TM One is operating is also challenging and very competitive. That's where I believe we have two-pronged strategies.

One is on strengthening our core, and at the same time complemented by the new growth areas as I mentioned earlier: cloud, cybersecurity, smart solution, and etc., yeah. Foong, with regards to your comparison on the underlying EBIT, I think I did mentions earlier, excluding World Cup and there are some one-off items we had last year, yes, the underlying EBIT should be growing at circa 2% year-on-year.

Fairus, this is for the first half, right? You're not talking about the second quarter, right?

No, this is expressly first half of the year.

Okay. If we look at the second quarter, what would that underlying EBIT growth be if we were to exclude the World Cup and other one-off items?

The largest component in actually the first half was actually our DNB write-down. That in itself actually the pull down.

I think that's how I will share with you, Foong. Okay.

Okay. No worries.

Sure. That's fine.

Yeah. Thank you so much, Dato' Amar and Fairus.

Thank you, Foong.

Up next, thanks Foong. Up next, Ranjan, do you have your hand up again?

Oh sorry, that's a mistake. It's fine.

I'll lower it.

Prem, you're up next. Go ahead.

Hi. Thank you for the call.

Sorry, I've got firstly a very simple question and I'm going to ask it very slowly. With regards to all these one-off items, if all we did was look at your reported EBIT as per the Bursa announcement, subtracted the forex losses in the back and this 5G MOCN cost of RM127.3 million, what is left would be the Prihatin.

When we look at that reported number on Bursa versus what you have in your slides, is that correct?

Yes. Yes.

Yes.

Okay. Perfect.

All right. Next simple question is is the FIFA World Cup cost entirely in this second quarter number or not?

Partially because it cut across actually two periods.

June and July,

yes, partially. Okay.

If I just spread it out by the number of days on either side, or the number of games played, I would have an idea of what it cost.

You don't have to do that, Prem. I think just divide by two, then you get the answers.

Okay. All right.

Yes, simple stuff. Yes.

Now the real question. The ROEs and the ROIC are both under pressure.

Yes, we do have this 127 million charge-off. We did have some of the Prihatin expenses last year.

The other thing that's happening, which shouldn't be happening, is you're still, despite this move to quarterly dividends, despite the fact that you're paying 75% of your earnings in the form of dividends, clearly you're still accumulating cash. How does management and the board look at this capital structure over a 2- to 3-year period?

Is there an ideal capital structure that we are thinking of that will avoid ROEs continue to fall, and this is largely because of falling financial leverage, if you could help us understand that?

Let me address some trending discussions with regards to our ROE, ROIC, Prem. Fundamentally, the way we calculated ROE is the trailing 12 months, and it carried the first half of this year and the second half of last year, which we know the second half of last year pretty much weighted by our Prihatin cost, and the first half of this year weighted by our DNB write-down.

That's the first actually intra profitability. When you looking specifically on the ROE, this is how I will frame this, yeah?

We do have our capital management policy, and internally, we have specific arrangements how we want to fund, how we want to use, how we want to allocate, and even return to the shareholders. I think that's why the very first things that you saw earlier this year, we have changed our dividend policy.

I think this is an activity that we will deal over the next 2, 3 years to actually come to the right capital structure if you like.

Bottom line, that the 20, 21% kind of ROEs should be more the norm than these 13, 14% ROEs that we're seeing at the moment?

I wouldn't want to actually allude it actually to the specific ROE, but what we think is our priority here is to maintain the resilience on investment-grade balance sheet while funding our growth investment. There are many other things like the fiber, our 5G backhaul, data center, and even submarine cable.

Nevertheless, we expect our operating cash flow remain the primary funding source, but this will be supplemented by selective borrowing, where it will improve our capital efficiency, right? Of course, actually value-accretive investment is always our priority.

The results will speak once we cross the bridge lah, yeah?

Okay. All right.

Thank you very much.

Thanks, Prem. Up next, Kylie, you're up.

Please unmute yourself. Kylie, we can't hear you.

Oh, hi. Can you hear me now?

Hi.

Yes.

I have three questions. All right.

Thank you. Thanks for the opportunity.

Firstly, did you recognize any copper sales proceeds in the first half of this year? Secondly, were Prihatin costs higher Q-on-Q this quarter?

Lastly, can you update us on the status of MyGovUC tenders by the government? Just this three for me.

I think the first questions, Kylie, with regards to copper sales, it is part of our normal activity, and we have been doing that, and it is already actually reflected as part of our first half, yeah? The second questions with regards to on your questions with regard to quarter-to-quarter movement, yes, we see a spike for our Prihatin in second quarter as compared to the first quarter.

I guess actually the last is actually on the MyGov tender, the Dato' Amar will actually take it.

Sorry, can I understand further which MyGov tender that you are referring to?

All right. I think previously, under MyGov cloud tenders, there were five appointed CSPs, including TM, and the other hyperscalers.

Right and so, I was led to understand that they were up for renewal. Just wanted to know about what's the status currently?

We participated. However, we understand that the process has been extended.

We remain vigilant and will pursue for any updates on that regards, yeah.

Oh, all right. Thanks so much.

Can I just follow up on the first question? On the copper sales proceeds, how do you recognize it, under which segment?

That is as part of our other operating income.

All right. Under the other segment.

Okay. Thanks, that's all for me.

No, not other segment. That is actually on our operating revenue.

We have in our income statement, other operating income, which is not part of our operating revenue, yeah? If I can clarify that actually, Kylie.

Oh, right, right. Sure.

Then, under the segmental breakdown, where does it fall under?

It's not even part of segment. It's not our core business, and we are doing that actually to avoid people actually stealing our cable, yeah?

Okay. All right, okay.

Thank you.

Thanks, Kylie. Luis, you're back for round two.

Please go ahead.

Hi, thanks. Just one follow-up question actually based on Ranjan's question earlier.

The wholesale cost for Network 2, can you remind us, is it similar or lower than your DNB cost for 5G? Thanks.

As we update earlier, the process have gone through a rigorous exercise via tender. I can assure that those that provide us the best offering that best suit what Unifi Mobile user utilization trend is what we are going for lah.

In a way, that has resulted us into ability to optimize our cost structure, as the offer is now better tailored to our trend of utilization.

All right. You should have better margins on the back of this essentially.

We expect that we will have a positive outcome on our bottom line.

Thanks.

Thank you. Thank you, Luis.

Thanks, Luis, and welcome back, Ranjan. Please go ahead and unmute yourself.

Hi. Thank you.

Just quick follow-up on the underlying EBIT. As you mentioned,

Sorry, Ranjan. Follow-up on what, Ranjan?

The underlying EBIT.

Underlying EBIT, okay.

As you mentioned, excluding the content costs, the underlying EBIT would have been up 2% or so. Are you also adjusting for the revenues from the content as well?

How are you deriving those underlying EBIT if you can share, please? Thank you.

Ranjan. I think it's a fair questions.

The EBIT is a output, is a functions of revenue and cost. In here, I would say it takes both, and that's how we have actually considered that.

Thanks.

Okay. Up next, we have Zhen Yi.

Go ahead.

Hi. Thank you, management, for the opportunity.

I just have a couple of questions. I will ask one by one.

The first question is on the Prihatin. You expect a spike in second quarter, and just now you mentioned about the take-up might not be as encouraging.

Would we expect the Prihatin cost to actually have a steep drop in the third quarter of fourth quarter? That's my first question.

Sorry, let me pick that one up. Based on the trend that we observed, yes, it will not be as encouraging.

The requests will not be as encouraging as what we observed last year due to the recent change in economic situation as well.

Thank you. Means quarter-on-quarter will have a drop lah in the third quarter, fourth quarter, normalizing trend?

No, no.

It's comparatively to what we had last year. For this year, as what Fairus was explaining, we saw an increase from first Q to second Q.

We could expect that yeah, the trend could be maintained as we come to the end of the year, but we don't anticipate that it will be as encouraging as last year.

Okay. Got it.

Got it. The second question is on NexDC.

Is it still on track to commission by fourth quarter, and how much actually has been contracted for the first 64 MW, and would they expect, once you commission, would it be a direct ramp-up, fully taken out, and you can expect the revenues to sort of kick in strongly in the fourth quarter or first quarter next year? Yeah.

Would you comment on that?

Yeah. NexDC is on track.

In fact, it's ahead of time. It will be completed in quarter 3 this year, yeah, the RFSI, yeah, for the first phase.

It is very encouraging to also say that almost 70% of the capacity has been fully contracted. We are in discussion of expanding to the next phase.

Okay. Okay.

The next phase will probably start by first half next year lah, we assume that?

We hope to start sooner than that.

Okay. Understand.

Then, my final question is on MyValueUp. Do you guys have any engagement with sort of Bursa or SC, and what kind of engagement, the progress on it, and what kind of value-up initiative do you propose to Bursa or SC?

Could you share some colors on that? Yeah.

Yes. Certainly, we are working very closely with respect to the MyValueUp.

I believe it's SC, right? SC or Bursa lah.

Yeah.

Correct. We're working very closely in that respect, especially in terms of how we communicate the growth program that Telekom Malaysia has been embarking beyond just what we are doing for telco, and we are embarking into our digital powerhouse vision as well.

These are talking about the data centers, GPUs, smart solutions, and even AI. I think we are very aligned to that requirement from SC as well, yeah.

Got it. That's all my questions.

Thank you very much.

Thank you. All right,

we have time for maybe one more question before we close the floor. Ranjan, go ahead.

Hi, thank you again. Just a quick housekeeping question.

The FY 2026 guidance for operating profit, for EBIT, the FY 2026 for similar levels versus FY 2025, is this for normalized EBIT or the reported EBIT? Thank you.

Ranjan, for clarity, the guidance for EBIT is based on our reported EBIT, yeah?

Okay. Thank you.

Thank you very much, everyone. Since there are no further questions, and if you do have any more questions, please feel free to drop me or the IR team a line, and we'll see you all next quarter.

Thank you very much for your support, and see you all again. Goodbye.