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Delano Kadir: [Foreign Language] and a very good evening, everyone. Welcome to TM's Financial Year 2025 Analyst Briefing hosted by our Managing Director and Group CEO, Encik Amar Huzaimi, together with our Group CFO, Encik Ahmad Fairus. I'm Delano from TM's Investor Relations team. And if you are in our distribution list, you would have received a copy of our analyst briefing presentation by e-mail earlier. Slides are also available on our IR website under quarterly results and will be shown during this session. But before we begin, I would like to kindly remind everyone to keep your microphones muted. We will only open the floor for Q&A session after the presentation. Without further ado, I would like to hand over the briefing to Encik Amar. Over to you, Chief.
Amar Bin Md Deris: Thanks, Delano. [Foreign Language] and a very good evening. Thank you, everyone, for making time to attend the briefing today. As usual, I will begin with our highlights before providing a brief overview of our overall 2025 financial year performance. Fairus will then elaborate on the operational and financial details, and I will be back at the end of the presentation with some concluding remarks before we proceed to the Q&A session. Let me begin with our recent highlights, including the latest updates on our products, collaborations as well as the award we received during the quarter. In the B2C segment, Unifi continued to strengthen its convergence leadership through enhanced Unifi UniVerse campaign and integrated digital experience with attractive connectivity, including mobile alongside enriched content and Smart Home offerings. The launch of our Unifi TV 2.0 in the second half of the year have seen encouraging adoption with 1 million Malaysians downloading the new apps in less than a month. Unifi Business continue to empower MSMEs with customizable and reliable digital solutions to grow their revenue and improve productivity. This execution was further recognized through PC.com Readers' Choice and Industry Choice Award received during the year, reflecting our strong customer and industry validation across Unifi and Unifi Business. In the B2B segment, TM One continued to drive digital transformation for government and enterprises. Our participation in MyCity Expo 2025 provides a platform for us to showcase our AI-powered city management with digital solution capabilities, enhancing visibility and engagement with key stakeholders. Last quarter, we were also entrusted by Bintulu Port Holdings through an MoU to support their long-term digitalization road map, reflecting confidence in TM's mission-critical solution for large-scale infrastructure operators. We are also named ASEAN Partner of the Year by Cisco, showcasing solid execution and growing traction across connectivity, cloud, data center and cybersecurity solutions. In the C2C segment, TM Global made solid progress in strengthening regional digital infrastructure and data center capabilities. The completion of our KVDC and IPDC Block 2 expansion has increased total power capacity, supporting growing hyperscalers' demand and AI-driven workloads. This execution has translated into differentiated product capabilities, including the scaling of GPU-as-a-Service, and our TM Nxera has recently secured 280 megawatts of power, paving the way for the upcoming hyperconnected AI-ready data center campus in Johor. TM Global industry leadership continues to be recognized with dual wins at the Asian Telecom Awards 2025, providing -- proving our capabilities in advancing digital infrastructure. Overall, momentum remains where we continue with steady progress in translating strategy into delivery as we advance our aspiration to become a digital powerhouse by 2030. Before I go into the numbers, let me start with the fundamentals. For year 2025, where the underlying business remains strong, we delivered strong revenue growth, maintained healthy cash flow generation and strengthened momentum across all customer segments, particularly in the second half of the year. As TM accelerates its transition towards a more digital and technology-driven business, we remain attentive to the evolving aspiration of our workforce. During the year, we received a significant number of voluntary separation requests from employees seeking early retirement or career transition. As a responsible employer, we have accommodated this request with a fair and attractive transition package. This is a win-win for both parties in the long run. Employees can comfortably transition to the next phase of their life while enabling TM to progressively align towards our future digitalization priorities. This underscores the group commitment in ensuring responsible workforce management and upholding the social pillar of our sustainability framework. This has resulted in moderated reported EBIT year-on-year. However, excluding this one-off impact, our underlying earnings remains resilient, supported by 8.9% quarter-on-quarter revenue growth, reflecting the strength of our core operations. With healthy cash flow generation, the Board declared a total dividend of RM 0.31 per share, comprising of RM 0.27 dividend and a special dividend of RM 0.04. Together with special dividend, total dividend payout stood at circa 70% of reported PATAMI, the highest payout ratio since we first revised our policy in 2018. We are confident of keeping this momentum to ensure continued commitment and value creation to the shareholders. CapEx for year 2025 is approximately RM 1.9 billion or 16.1% of our revenue. As we continue to support key growth initiatives, CapEx spending remains within guidance. Looking ahead, TM will continue to deliver sustainable dividend, maintain disciplined CapEx and further strengthening its balance sheet to support long-term earnings growth. With that, I will now hand over to Fairus to walk you through the financial and operational highlights in greater detail. Fairus?
Ahmad Bin Rahim: Thank you, Chief. Let me walk you through the reported results and the adjustments for the quarter as well as the full year. 2025 was a demanding year. Against this backdrop, TM's revenue continued to strengthen, particularly in the second half, reflecting improved execution across our key segments. Reported EBIT and PATAMI reflect the impact of the voluntary separation request from employees undertaken during the quarter, foreign exchange movements as well as selected nonrecurring items. After adjusting all these one-off items, underlying EBIT and PATAMI showed a stronger operational momentum. As shown in the presentation, underlying EBIT increased by 3% year-on-year, while underlying PATAMI improved by 10% year-on-year. This illustrates the resilience of our core operations, while reported earnings reflect deliberate one-off optimization actions undertaken during the quarter. Overall, TM delivered resilient top line growth with revenue increasing 1.4% year-on-year. This represents a stronger uplift compared with the previous year. As mentioned earlier, the underlying business remains strong, as we continue to steer towards leaner profitability over the medium term. More importantly, than the full year number, the improvement in the second half momentum and the strong fourth quarter exit provide a better indication of the underlying trajectory heading into our financial year 2026. Let me share more details in the following page. B2C performance remained resilient, delivering 0.7% positive year-on-year while navigating an increasingly competitive retail environment. Fixed broadband subscriber rose to 3.23 million, representing 1.6% growth year-on-year and 0.7% quarter-on-quarter. Net addition has been stabilized in the second half of the year, supported by effective convergence offerings and ongoing enhancements to the customer experience. Within the Consumer segment, we continue to see strong demand driven by enhanced convergence solution, including smart home capabilities and enriched content offerings. Unifi Business segment remains positive as we continue to actively push end-to-end solutions for entrepreneurs, focusing on helping them to grow revenue, cost efficiency, including productivity. ARPU remained healthy at RM 137 per subscriber. This is driven by upgrades to higher value plans with devices playing a supporting role, contributing low single digit of -- which is contributing low single digit of total Unifi revenue. Convergence offering continued to show positive momentum with FMC penetration improved compared to a year ago. This signals broader household adoptions of integrated broadband mobile content offerings. Quad-Play and Triple-Play customers grew by 8% year-on-year, supporting higher monetization potential and improving loyalty among convergence households. Looking ahead, with rising FMC penetration, stronger device bundle traction and a stabilized subscriber net adds, Unifi remains well-positioned to deliver steady, high-quality growth and remain a key contributor to overall TM Group revenue. TM One delivered a stronger quarter with momentum improving 11% quarter-on-quarter, reinforcing execution discipline in the second half of the year. Recurring revenue remained solid, contributed by a deliberate shift towards longer-term contracts. This improves overall revenue visibility and mitigate seasonality. Connectivity continues to anchor the business while the new core, such as IT services, data center as well as cloud solutions, recorded a meaningful quarter-on-quarter uplift. This uplift was partly from data center co-location from banking sector alongside higher contribution from global digital travel agency. Together, this reflects the restrengthening of the enterprise-focused data center propositions. From the product mix perspective, there's also a shift in the direction. Cybersecurity and managed solutions are gaining traction as customers opt for longer-term service-based engagements. These deliver more stable recurring revenue and provide sustainable business model. On ESG-aligned initiative, TM One has secured several strategic collaborations. This includes expansion of the smart industrial park with NCT Group, which accelerates customer position as a digital-ready and energy-efficient ecosystem. In the fourth quarter, TM One also secured a smart port digitalization partnership with Bintulu Port Holdings Berhad, supporting its transition to a fully digital and sustainable port by 2030. Looking ahead, demand across cybersecurity, cloud, data center and smart solutions continues to grow, providing visibility into TM One's 2026 growth trajectory. The performance this quarter signals the early pace of structural transition with clearer execution priorities, refreshed leaderships and a more resilient portfolio. TM One enters the year on a more stable footing to support their long-term growth vision. On the C2C, C2C delivered another solid performance. Revenue is growing 14% against last quarter, supported by consistent domestic and international demand. Revenue remains predominantly recurring. This provides stable support to the group's overall results. Domestic growth continued to be driven by ongoing rollout of mobile fiber backhaul through the -- and rising demand of fiber port or our high-speed broadband access. This initiative support stable domestic revenue base while enhancing our network utilization. International performance is stronger, driven by rising demand for high-capacity dedicated cross-border and data center to data center connectivity. Our submarine cable investment readiness continues to scale, supported by diversified east-west routes, access to open cable landing stations, enabling greater connectivity and faster capacity monetization. Demand from growing AI workloads and data traffic continues to drive requirements for scalable digital infrastructure and wholesale connectivity expansion. On data center, we see there's an improvement or increase, and this is mainly due to completion of our IPDC and KVDC Block 2 expansion, which we have achieved more than 50% immediate take-up. On the partnership with Singtel, TM Nxera continues to make steady progress and remain on track to deliver the uplift enabled by energy efficient and sustainable data center design by second half of the year. Overall, TM Global continues to build momentum in supporting hyperscalers, domestic operators, underscoring the importance of TM in supporting Malaysia's digital economy by providing end-to-end wholesale connectivity. And this reinforce our ambition to become a digital powerhouse by 2030. Taking an alternate view of revenue by product, all product categories recorded quarter-on-quarter growth, reflecting stronger execution in the second half. For the full year 2025, overall revenue performance was supported mainly by data and others, which helped offset softness in voice and Internet product and services. Data revenue grew 6.2% year-on-year, supported by strong momentum in the fourth quarter, and the growth was mainly driven by higher demand for international as well as domestic data services, consistent with stronger C2C performance. This is largely driven by improved capacity availability -- improved by capacity availability. Other revenue strengthened 10% year-on-year, supported by solid quarter-on-quarter performance in fourth quarter 2025. This was driven mainly from contribution for our data center co-location in C2C, bundled service offering and continued growth in our education arm. As for Internet revenue, we see a decline -- slight decline year-on-year due to ongoing competitive pressures. Nonetheless, performance improved with positive quarter-on-quarter and modest increase compared to fourth quarter 2024, supported by our convergence campaign, indicating signs of stabilization. As expected, our traditional voice revenue continued its structural decline year-on-year following continued adoptions of OTT-based application. However, quarter-on-quarter growth in the fourth quarter in 2025 helped partially mitigate the annual decline. Turning into cost to revenue performance ratio. The full year 2025 cost to revenue profile reflects deliberate choices. We invested in defending B2C, business-to-consumer, momentum, including absorbing higher mobile access costs. At the same time, underlying operating costs remain well controlled. Direct costs rose to 14% year-on-year, mainly from incremental revenue to support growth in subscriber as well as mobile-related costs and international outpayment in line with C2C revenue growth. Cost movement in our ongoing support to drive contract renewal enhance customer and long-term stability. As for manpower costs, there is increased 8% year-on-year, reflecting the voluntary separation requests undertaken during the third quarter and fourth quarter. We ended the year with a mid-single-digit reduction in headcount, consistent with ongoing productivity actions. The increase also reflects differences in incentive offerings compared to the prior year. As for operational costs, we see a decline by 2% year-on-year, driven by multiple items, including some reversal from our impairment on trade receivable due to better collections and credit quality. Meanwhile, our depreciation and amortizations increased 3% year-on-year, in line with the planned capitalization -- asset capitalization as well as some one-off item. Overall, TM's structurally strong operations continue to support resilient margins in a competitive environment. Moving to the next slide on CapEx. As actually my MD mentioned, our total CapEx spend was RM 1.9 billion in 2025 or equivalent to 16% of total group revenue. And this is slightly within guidance. Of this, some 30%, 1/3 was allocated for our access network, 20% for network and the remaining for our support system. Overall, CapEx intensity remained comfortably within our guidance with a 21% year-on-year uplift. The higher spending reflects selective investment to support growth initiatives, and these include investment in digital infrastructure and connectivity as well as completion for our data center and submarine cable investment. We continue to exercise strong capital management discipline with clear allocation priorities. In 2025, less than 20% of the capital was invested in sustaining and protecting our core business, while majority was allocated to value-accretive growth opportunities. This approach ensures capital efficiency while positioning the group for future demand. Now, let us move to our cash flow and balance sheet position, which will be my final slide for today. I'm pleased to report for the full year ended December 2025, TM's Group cash and cash equivalents stood at RM 2.5 billion compared to RM 3 billion at the end financial year 2024. Free cash flow circa RM 1.6 billion, lower than last year, reflecting increase in capital investment spending during the year, coupled with a moderation of in operating cash flow and scheduled borrowing repayment during the year. Despite a year shaped by one-off item and heavy investment cycle, we continue to generate healthy operating cash flow, providing continued capacity to support both shareholders' distribution and future growth initiatives. ROIC, or return on invested capital, moderated primarily due to the impact of our voluntary separation request where costs recognized this year and temporarily reducing our reported EBIT. Even with this impact, our ROIC exceed our cost of capital, indicating ongoing value creation. Importantly, this is a nonrecurring item. Normalizing this, our ROIC actually improved compared to last year, reflecting continued value creation. As announced earlier by Encik Amar, the Board approved a total dividend of RM 0.31 per share, representing approximately 70% payout ratio to our reported PATAMI. This increase compared to the last year -- this is an increase compared to the last year. Overall, TM's group balance sheet remains strong, providing sufficient headroom for future investment and maintaining the dividend commitment. This positions the group to fund future growth while maintaining a balanced financial profile. That shall conclude my financial and operational highlights, and I'm returning back the session to my GCO and Chairman. Over to you, Chief.
Amar Bin Md Deris: Thank you, Fairus. Now, let me provide a brief update on our ESG activities for the year. Sustainability remains a key pillar underpinning TM's long-term competitiveness. In 2025, we continue to strengthen our position through recognized governance standards, sustainability-driven innovation and community impact with improvements reflected in our ESG ratings and external recognitions. We improved our ESG ratings and recognized as the National Corporate Governance and Sustainability Awards, or NACGSA. TM ranked seventh among 847 listed companies nationwide and received Industry Excellence Award in telecommunications and media. The recognition reinforces the progress we are making on transparency, accountability and sustainability reporting, areas we will continue to build on. TM was also named as a 3-Star ESG Lister under the UNGCMYB ESG Select List 2025, recognized by the UN Global Compact Network Malaysia and Brunei. This award is based on demonstrated impact through 3 categories, namely ESG Trailblazer, ESG Breakthrough Innovation and Purposeful Partnership, which includes our smart urban forestry solutions. In addition, our Chief Corporate Officer was also awarded the Forward Faster Chief Sustainability Officer Award for large corporate early this year. This recognition reflects not only compliance, but the integration of sustainability into how we operate and grow the business. For full year 2025, the group delivered within the guidance provided to the market, reflecting disciplined execution across revenue, profitability and CapEx. Revenue grew by 1.4% year-on-year, a low single-digit increase while reported EBIT at RM 2 billion, with underlying performance exceeded the guidance. CapEx amounted to 16.1% of revenue, all in line with the guidance previously shared. So as we entered in the final year of defend and build phase under our PWR 2030, we are transitioning to the grow and replicate phase, marking the next phase of our transformation journey. Across the group, each business segment continues to advance its strategic priorities for sustainable growth and long-term value creation. In B2C, our suite of convergence services continue to strengthen through Quad-Play campaigns. This includes expanded smart home solutions, various device offerings and enhanced unified TV, driving deeper customer value per household. B2B momentum remains encouraging, driven by continued expansion of digital solution across ICT, cloud, data center, cybersecurity and smart services. We are also strengthening partnership across enterprise and public sectors in supporting Malaysia's digital transformation agenda. C2C continues to elevate Malaysia's position as a regional digital hub by expanding core digital infrastructure and services. This includes expansion of submarine cable system capacity, open cable landing station, AI-ready data centers and GPU-as-a-Service to meet the growing hyperscalers' demand. Leveraging our network of fiber, TM continues to provide mobile backhaul for the dual network 5G rollout, delivering seamless connectivity. Meanwhile, our data center development continued to enhance the group infrastructure readiness with TM Nxera progressing in line with the initial project timeline. The TM outlook for 2026 remains positive and is underpinned by disciplined execution of our strategic priorities. Now, let me provide an update on our 2026 guidance. For revenue, we are projecting a low single-digit increase from the previous year. EBIT for 2026 is expected to be at similar level to 2025. The CapEx percentage of 2026 is forecasted to be between 18% to 20% of revenue. This guidance underscore a balanced approach that supports long-term value creation while maintaining financial discipline. Overall, we are confident that we will achieve the 2026 market guidance, supported by continued growth and disciplined execution. With that, I thank you for your attention. We shall now move on to the Q&A session. Thank you.
Delano Kadir: Thank you, Encik Amar and Encik Fairus. [Operator Instructions] First question comes from [ Fung ]. Go ahead, [ Fung ], and unmute yourself.
Unknown Analyst: I have 3 main questions. Firstly, can you break down the RM 325 million in normalizing items for the fourth quarter? Second question on the depreciation and amortization. I see that the cost has risen quite a bit Q-on-Q going from the third quarter to the fourth quarter. And I think, Fairus, you mentioned just now during your presentation that there are some one-off items. So can you provide more color there as to what that is and how much was that one-off item? And then my third question is on the guidance. So I see that the EBIT guidance is flat for 2026 despite the fact that you're expecting some growth in revenue. Can you provide us some color as to why you are expecting flat EBIT? And can I also clarify whether the base for the guidance, right, is it the RM 2.47 billion underlying EBIT in FY '25? And also on guidance, guidance-wise, right, any guidance on dividend policy for 2026? Are we in the midst of reviewing the policy? Or are we expecting to keep it at 40% to 60%? Yes, those are my 3 main questions.
Ahmad Bin Rahim: [ Fung ], thank you for the questions. So your first question is actually what are the breakdowns for the normalizing items in quarter 4. Basically, there are 2 items. One is our separation cost. The other one is the share of ForEx loss on our operations, and the amount for ForEx loss is circa RM 30 million for the quarter. I hope that clarifies for the first question. On the -- number two, on the depreciations and amortizations, you're right, I did mention there are some one-off items, and this is pretty much some of the cleanup for the assets as well as some review of our useful life. And otherwise, actually, it should be trending as usual, and we hope to see the similar trend back in 2026 -- the next quarter 2026. Yes, back in 2026. EBIT flat despite expecting growth in revenue.
Amar Bin Md Deris: Thank you, [ Fung ]. Let me just take on the dividend policy. Would there be a review of policy? I will assure you, we will make announcement should there be any announcement on the change of policy on the dividend. But we have been stating, at least maintaining, our dividend thus far, and we will certainly make announcement should there be any change in the policy. On the EBIT flat, of course, there could be expectation of increase in cost as well. In that sense, we are maintaining our guidance as EBIT flat.
Ahmad Bin Rahim: And then to address you, [ Fung ], whether the base guidance is actually on underlying or reported, typically, we will go unreported. We just want to be very clear, it will be a similar level of the reported. Yes.
Unknown Analyst: Yes. I see. Okay. So if I can just follow up with some questions, right? So firstly, going back to the normalizing items. Okay. So I also note, right, that in the P&L that you have other gain of RM 92 million that was booked in the fourth quarter. So is this still related to fair value gains on the tech fund? That's question number one. And you also mentioned, I think, some copper sale gains in your notes. So how much was that in the fourth quarter? So that's the first question. And then, on the D&A, just to clarify again, right, what was the -- was there a one-off in the fourth quarter in terms of D&A? And just to clarify, the run rate going into 2026, right, should we be looking at the third quarter instead of the fourth quarter D&A? And then lastly, when it comes down to the EBIT guidance, Fairus, you mentioned that we are looking at the reported EBIT, which is only about RM 2 billion, I see from the slides. So from the underlying amount of RM 2.47 billion in 2025, you are expecting it to go down to RM 2 billion in 2026. Am I -- is it fair to think about it that way? And if so, why would that be the case? Yes, those are my follow-up questions.
Ahmad Bin Rahim: Actually, quite a lot of questions. I'm trying to actually dissect again. I think I'll just quickly on some of the questions with regards to depreciation and amortization, you are right. There's -- as I mentioned earlier, there's actually one-off item. And as a base, we should be looking at quarter 3 as actually the baseline. Okay. And how much is -- did you ask how much is copper gain?
Unknown Analyst: Yes, I asked about how much is the copper sale gain in the fourth quarter and also whether the RM 92 million in other gains, right, that you booked in 4Q, is that fair value gain on tech fund again?
Ahmad Bin Rahim: All right. So just for clarity, for the other gains, if you see in our consolidated income segment of RM 92 million, it's referring to our fair value gain, right? So there's actually a spillover from quarter 3 to quarter 4, and that is actually the number, yes, explaining the movement for other gains. And as far as actually copper monetization, it will be actually reflected under our other operating income.
Unknown Analyst: Got it. Okay. And the EBIT guidance, you were saying that you are looking at it being flat, but what you're comparing to is the reported EBIT of only about RM 2 billion. So from the underlying of RM 2.5 billion in 2025, you're expecting it to come down to about RM 2 billion in 2026?
Ahmad Bin Rahim: Okay. I think let's provide some colors on the EBIT guidance. Of course, I think from actually benchmarking perspective, we are looking at the same. We are anticipating a similar trend of voluntary separation requests for the 2026, right? So -- and actually taking that into account with a similar request, and this is actually what we think from EBIT guidance perspective. Yes. Does that actually answer you?
Unknown Analyst: Yes, it does, yes. Yes, clarifies a lot.
Delano Kadir: So up next, we have Luis. Go ahead, Luis.
Luis Hilado: I initially had 3 questions as well. The first is the normalized EBIT and PATAMI in the fourth quarter was down fair bit and seems to be because of direct costs, is this primarily equipment costs or it's the mobile access cost that you spoke about during the presentation? The second question I had is regarding Unifi. The blended ARPU, is that inclusive of device sales still? Or is there an actual ARPU uplift in terms of migration to higher-end plans? And the third question is, if you could give us an update on the status of the TM Nxera DC. I saw that you mentioned that you've secured 280 megawatts of power. Does that mean the DC's long-term target is to be 280 megawatts? And any progress on the first 64?
Amar Bin Md Deris: Let me -- is that the only question, Luis? Thank you.
Luis Hilado: Initially, yes. I can -- I will repeat...
Amar Bin Md Deris: Thank you. Let me take on the TM Nxera DC on the 280 megawatts. Of course, it is anticipated to be completed by second half of the year, at least on the first phase, yes, not on a full scale. It's on the first phase yet, which is 64 megawatts, all right? Second half of the year, quarter 3, hopefully, yes. So on the Unifi blended ARPU, yes, it's inclusive of device. Yes. However, the take-up of higher plan also increased for the second half of the year. I'll pass to Fairus on the direct cost. Thank you.
Ahmad Bin Rahim: Sorry, Luis, just actually to add, what my MD said, the blended ARPU is -- actually is a combination of actually our device, but it is also -- but the factor is actually driven by 2 things. One is actually the device as well as the higher take-up as higher packages prices. Nevertheless, our total revenue -- device revenue is a low single digit to total group revenue, just to give you the context. On the direct, I just wanted to recap. I think your question is why was it my EBIT went down and you think it is because of direct costs. Am I correct, the normalized EBIT?
Luis Hilado: Normalized EBIT, correct, and PATAMI.
Ahmad Bin Rahim: Yes. All right. So I'll break down on the normalized EBIT. Actually, the normalized EBIT is actually -- looks lower by 2 items. We have one-off items from depreciation and amortization, as I mentioned earlier, in the quarter 4. And secondly, there's actually -- just 1 second, there's a catch-up actually cost on a one-off staff benefit that actually flow in quarter 4 when it wasn't there in quarter 3. So this should be a one-off item. Again, the 2 is one-off item, and that will still be -- that will actually be normalized back in quarter 1 this year. And consequently, and when we're looking at actually the lower EBIT, it flows down to our PATAMI similarly, yes.
Luis Hilado: Sorry, Fairus, just to clarify. So the D&A and the catch-up benefit is actually one-off, but in terms of the normalization, you didn't classify it as such. And that's why normalized EBIT is lower.
Ahmad Bin Rahim: Yes. And so for the -- sorry, you are asking for the depreciation, right, Luis?
Luis Hilado: Yes. And the catch-up benefit on the ForEx first.
Ahmad Bin Rahim: Okay. Yes. For the D&A, it's actually basically a one-off, some was due to cleanup and review of our useful life. We expedite some of the asset, right? So that's actually one part. On the catch-up, so that is actually one-off item that was actually supposed to be -- that was actually flowing in quarter 4, yes.
Luis Hilado: But it was not part of the normalization of the EBIT and the PATAMI.
Ahmad Bin Rahim: Yes. That's correct. That's not part of the normalized, but that's the reason why the overall EBIT went down, correct.
Luis Hilado: Yes. It's more of timing. Okay. Sorry, just to clarify on Nxera. The -- is there any prospective tenancy you've already -- you can let us know about? Is it primarily you fill the rate once you get the second half construction?
Amar Bin Md Deris: Yes. The demand is encouraging. So we are now considering on the next phase of the buildup, if we are able to complete the transaction by at least the second half of the year.
Delano Kadir: Prem, you are up next. Go ahead and unmute yourself.
Prem Jearajasingam: I have a bunch of questions. Essentially, I just want to clarify with regards to your guidance and all these one-off items. First of all, this one-off staff cost benefit that showed up in the fourth quarter, it is unusual for the -- it is significant in the fourth quarter. You have not taken it out. But is this something that we see every year anyway? So it is not really one-off. Is that a fair comment on this staff benefits? I'm going to do it one by one.
Ahmad Bin Rahim: Okay. So, Prem, it is a flow through in quarter 4. It should be normalized in actually the -- in 2026.
Prem Jearajasingam: So it will not show up in 2026. Is that what you mean?
Ahmad Bin Rahim: It will not show up in 2026. Yes.
Prem Jearajasingam: Okay. Good. Secondly, the VSS costs by the sounds of it since you adjusted RM 325 million at the EBIT level and you -- I mean, as per the announcement, RM 30 million in ForEx losses realized. Therefore, VSS is potentially about RM 295 million. Are we expecting a similar number for 2026 or a bigger number for 2026?
Amar Bin Md Deris: Prem, thank you for asking on the voluntary separation. These are requests, which we received from our employees. As you know, we're moving into the digitalization and our transformation, and we are very attentive to this aspiration of the employees. And based on the trend, hence, that's what we are predicting there could be a possible similar tick up. Hence, we are prepared to ensure that we are able to at least accommodate for some of them.
Prem Jearajasingam: Okay. All right. Perfect. Now, am I right in thinking that when they use VSS, there is typically a payback period for that cost, and therefore, the actual VSS impact in the -- I mean, 1 year after, if you were to get a 2-year payback, then you'd assume half that VSS cost comes back in the form of a lower staff cost? Would that be a fair assumption?
Amar Bin Md Deris: Yes. Yes. It is a fair assumption.
Prem Jearajasingam: Yes. So, in 2026, having spent, let's call it, RM 300 million in 2025, we potentially get back about half of that in lower staff costs in 2026.
Amar Bin Md Deris: Yes. Some of the benefit will flow through in the year 2026, but we expected a full payback with the circa of maybe 2 years.
Prem Jearajasingam: Yes. Okay. Perfect. Now, with regards to -- there's -- also, as part of your announcement, there is this -- the post event where you are switching 5G network to U Mobile, and as a result, you forfeit something like RM 127 million in prepaid fees for 5G access, do we need to take further provisions for this in 2026? Or has that already been captured in our accounts already?
Ahmad Bin Rahim: I think, Prem -- I think as we -- as we explicitly mentioned in our announcements, this unused prepaid capacity will need to be provisions in 2026.
Prem Jearajasingam: So you will -- okay, so you will need to provide. And in your guidance for 2026, is this RM 127 million part of the adjusted EBIT or the underlying EBIT? Because it's all getting very confusing what we are taking -- putting in and taking out. So if your baseline EBIT guidance for 2026 is RM 2.0 billion, is that after taking into account this RM 127 million or not?
Ahmad Bin Rahim: Yes, Prem.
Prem Jearajasingam: So it's already captured. That RM 2.0 billion guidance includes what is essentially RM 300 million of VSS, RM 127 million of the 5G-related forfeits. Anything else that is one-off in nature that is being guided for in that 2026 guidance?
Ahmad Bin Rahim: I think we discussed a bit on the separation. What we -- it is actually based on the guess. What we only have is actually current-year trend. So that get emulates and actually incorporated part of our 2026 guidance, yes. So yes, those are the items.
Prem Jearajasingam: All right. I'll leave it there for now.
Delano Kadir: Isaac, you are up next.
Chee Chow: I have some questions just focused on the manpower cost itself. I think if I compare today's and I look at the trend for the past 10 years, the manpower cost as a part of the revenue has always been like hovering around 20% to 22%, while the number of staff strength have shrink quite -- very significantly compared to 10 years ago. So I was just trying to understand, I mean, like what happened? I mean, we are seeing more than 10,000 declines in the staff strength and yet manpower cost as part of revenue is still quite sticky at 20% to 22%. That's question number one. Number two is also related to manpower, but why don't we just take this first?
Amar Bin Md Deris: Thank you for the question, Isaac. So one of the main reason is because of the -- even though we are able to optimize the manpower, but there will always be increase in salary on per annum basis and also recurring salary adjustment as and when the interval comes. So that kind of like push it up again one way or another.
Chee Chow: All right. Number two is on the VSS expectations for 2026. Is there a reason why this -- okay, so do you approve all the applications for 2025 or there was some application that was not approved, that's why you expect it to come in, in 2026? I was just trying to understand, I mean, beyond '26, about '27, '28, what should we be looking at in terms of where do you want to go in terms of your staff counts and in terms of your manpower cost for that matter?
Amar Bin Md Deris: Well, of course, we can see quite a rapid trend for 2025, but we -- but most of it is attributed to early retirement, so we could foresee it would taper down over the years for the early retirements, right? And that's where we expect it. At least, the trend will taper down. But since this year -- I mean, since last year, we noted that there's quite a request -- a significant request for separation, yes, for career transition, for early retirement. And for us, we take the liberty to approve all these requirements -- requests. And as I said earlier, we can foresee the trend to at least taper down, but -- that's what we are expecting perhaps the trend could be almost similar for this year, and we are prepared for that.
Chee Chow: All right. Just I think one more question before I pass it to someone. So now that you are transitioning to the U Mobile, so has the transition -- so when is the transition supposed to start? And in terms of the annual savings, is there any numbers that we can share? Is that more the cost? Is that more of the efficiency, like on this one? Any guidance on that would be very helpful.
Amar Bin Md Deris: So we have initiated the process by issuing the notice of termination. So -- since it's a process, it will be a gradual phasing out of our subscribers from DNB to U Mobile. So we anticipate it will be completed by end of the year, hopefully by quarter 4 this year, where it will be fully cut over if all is being delivered according to plan, yes. And with respect to the savings, yes, there will be, as per the disclosure in Bursa as well, we anticipate that there will be a saving in this near term with respect to the commercial.
Chee Chow: So in terms of the unused amount, so by the end of the year, would it be lower than what it was shared? Or that was -- I mean, so the RM 121 million, as you continue to use it throughout this year, wouldn't that be lower by the end of the year? How should we look at that?
Amar Bin Md Deris: No, not necessarily, Isaac, because the capacity can be carried over throughout the contract tenure.
Delano Kadir: Up next, [ Paige ], go ahead and unmute yourself.
Unknown Analyst: I apologize for kind of doubling down on this, but I want to talk further about the EBIT guidance. Can you give EBIT guidance on an underlying basis? Like how do I understand from the RM 2.4 billion into next year? And then, how do I think about it building on the adjustments for which I understand is the 5G versus the VSS? But like on an underlying basis, can we just get a clear number on that, please?
Amar Bin Md Deris: We expect that it should be similar to the current guidance, Paige. Yes.
Unknown Analyst: So to clarify, underlying EBIT guidance for next year would be in line with the RM 2.4 billion for this year. Is that correct?
Ahmad Bin Rahim: Yes, for the underlying, correct.
Unknown Analyst: And then you would expect that -- I mean, obviously, we're expecting some revenue growth. So we're just expecting cost growth in line with revenue growth. Is that?
Ahmad Bin Rahim: Exactly. So there will be some growth in terms of our IT applications and some of the licensing as well, which we can see that the trend is rising in the market.
Delano Kadir: And you're back again, Luis, for round 2. Go ahead.
Luis Hilado: Yes. Just 2 housekeeping questions, please. Are we expecting copper sales again this year and going into the long term? Any guidance? And how much inventory you still have to sell? And second is on the -- just to nail down that the fair value gains on the tech fund, those are all done already so that we won't see that 2026 onwards.
Amar Bin Md Deris: I believe you will not see the tech fund for 2026. That one I can confirm. But for the copper sales, as you know, we are ramping up the recovery of this copper to mitigate the case of cable theft as well. So it is in our best interest to speed it up, and we have started off this year. So you can expect the same trend for next year.
Delano Kadir: Up next, we have Mun Chan. Go ahead and unmute yourself.
Mun Chan: I just have 1 question. So actually, what's the main reason for you to switch from this DNB to U Mobile?
Amar Bin Md Deris: Thank you for the question. I think for Telekom Malaysia per the announcement of the government of -- for the dual 5G network. So we have run through a process of acquiring what would be the most competitive in the tender process. So the outcome is what we have announced today. I hope that will clarify.
Mun Chan: Sorry, just maybe just a follow-up. So does that mean that you should be enjoying better terms, I mean, under this U Mobile as compared to DNB?
Amar Bin Md Deris: Yes. I mean, for example, as I mentioned earlier, in our disclosure as well, we expected to see some benefit within the near term with respect to the rates, yes.
Delano Kadir: Up next, Kelly. Thanks for joining us from your -- even though you are on maternity leave. Go ahead, [ Kylie ].
Unknown Analyst: I just want to dive in deeper on the DNB access agreement. So is -- are you subject to other penalties or termination fees from the termination? And for your U Mobile agreement, is it based on actual usage? Is there a minimum capacity offtake or just based on traffic volumes? So that's all for now. I've got another set of questions later. I'll follow up after you answered this set.
Amar Bin Md Deris: We are exercising our rights as per the access agreement on the -- our termination notice. So we don't foresee any penalty, as we are merely exercising our rights under the agreement. That's one. On -- what was the question on the paper usage traffic volume?
Unknown Analyst: All right. Do you -- is TM subject to a minimum capacity offtake? The reason I asked because that was one of the terms under the DNB agreement. For U Mobile agreement, is it the same terms?
Amar Bin Md Deris: As per any typical MOCN agreement, there will be a minimum capacity uptick, but the level will be different.
Unknown Analyst: Okay. Just 1 more -- yes, just 1 more just on your submarine cable. For Asia Link Cable, should we expect material earnings contribution? And what services will you offer that will ride on this cable? Is it mainly managed wavelength or IRUs? Yes, what should we expect?
Amar Bin Md Deris: So yes, there will be some contribution as one of the cable that we have invested in will be ready this year, which is ALC. The services will be -- there are many services, not only IRU. There are bandwidth services, IPL as well that we are selling on the international market.
Unknown Analyst: Right. So can I just confirm that fiber sales for these international submarine cables are something that TM would not be prioritizing?
Amar Bin Md Deris: Can you repeat the question again?
Unknown Analyst: All right. So the main services that you will offer for your global -- for TM Global's customers would just be leased bandwidth.
Amar Bin Md Deris: Yes. Our submarine cable on bandwidth leasing.
Delano Kadir: Up next, Azim Faris.
Azim Faris Bin Ab Rahim: Can I just get you to recap what is the normalizing item for the third quarter of 2025?
Ahmad Bin Rahim: Azim, if I can just help to recap, actually, there are 2 items. One is actually our separation cost, and the other one is actually our ForEx. Yes.
Azim Faris Bin Ab Rahim: I mean for the third quarter 2025, not the first quarter.
Ahmad Bin Rahim: Yes, correct. Actually, it's the same, both items, third quarter. Yes.
Azim Faris Bin Ab Rahim: Can I get the number, the amount?
Ahmad Bin Rahim: Yes. Majority of the normalizing item in quarter 3 is actually coming our -- from our VSS, and I think they added actually with our ForEx loss in the quarter.
Azim Faris Bin Ab Rahim: Next, my question is about the gain on the fair value, right, for your investment fund. May I know where is it showing up in the balance sheet? Because I see actually there's some decline in the investment fair value through P&L. Is that the line that we should look at?
Ahmad Bin Rahim: Sorry, Azim, if I can just recap, you would like to clarify where is actually the -- where we derive the fair value in the balance sheet, right? Is that correct?
Azim Faris Bin Ab Rahim: Yes.
Amar Bin Md Deris: Because they are recognized in other gains in our income statement. And that you can see the fair value to -- from the balance sheet category, it will be part of our noncurrent asset and the investment at fair value through P&L, FVTPL. Thank you.
Azim Faris Bin Ab Rahim: Because I think if you compare to the third quarter 2025, the amount is actually larger...
Delano Kadir: Sorry, Azim, you are actually breaking up. Can you just repeat that question again?
Azim Faris Bin Ab Rahim: Yes. I think I'm looking at the same line, which is the noncurrent asset, the investment at fair value, right? In the third quarter, the amount is, I think, RM 250 million, and this fourth quarter is RM 107 million, is actually declining. Am I seeing the right thing?
Ahmad Bin Rahim: Sorry, Azim, I'm trying to actually -- hopefully, I can provide a better clarity because it's actually -- it is done over a period, right? So during the quarter, so we have actually revised up. Then when actually the disposal was completely done, then actually -- then there's -- hence, the reason why you cannot see the differences, yes.
Azim Faris Bin Ab Rahim: So meaning there is some disposal on the investment in the fourth quarter, right? Is it?
Ahmad Bin Rahim: Yes, correct.
Azim Faris Bin Ab Rahim: Okay. May I know what is the value of that?
Ahmad Bin Rahim: Sorry, say that again.
Azim Faris Bin Ab Rahim: The value for the disposal.
Ahmad Bin Rahim: We have not disclosed this, but -- because it's actually one off from actually one of our long-term technology fund, yes.
Delano Kadir: Up next, we have Joe. Go ahead Joe and unmute yourself.
Joe Liew: Can you hear me?
Delano Kadir: Yes, loud and clear.
Joe Liew: Yes. All right. Great. I have 3 questions from my end. First, I just want to reconcile your adjusted PATAMI with your adjusted EBIT in the fourth quarter of '25. So adjusted PATAMI is RM 363 million according to your slides, your adjusted EBIT is RM 541 million. I just want to know in between these 2, what are the items that you actually deduct from the EBIT? Because if I just deduct your interest and your tax, I wouldn't be able to get RM 363 million. So is there an additional item that you actually deducted to get the PATAMI, adjusted PATAMI?
Amar Bin Md Deris: Thank you. Actually...
Ahmad Bin Rahim: Thank you, Joe. So I think we have actually been mentioning, actually, on the -- for a couple of items. One is actually our VSS costs, and the other one is actually our ForEx. So taking down to ForEx, there are also ForEx on borrowings. And these are all net tax impact, yes. And only those 2 items, ForEx at operations and borrowings as well as actually the VSS net tax. Thank you.
Joe Liew: Okay. So that will get me to the RM 541 million EBIT, right, adjusted EBIT, correct? So if I knock off my tax and I knock off my interest, I will be able to get about RM 400 -- no, slightly RM 430 million, not RM 363 million. So that's why the discrepancy there as stated above.
Ahmad Bin Rahim: Sorry, I probably should actually -- we also actually normalized one-off gain from our technology fund actually at the PATAMI level. Thank you.
Joe Liew: All right. But that would mean you deduct the gains from the technology fund twice, isn't it? Because the RM 541 million already excluded the gains from technology fund.
Ahmad Bin Rahim: Gain is not actually recognized at EBIT, actually below the EBIT line. The gain from actually our -- yes. Thank you.
Joe Liew: Okay. Okay. All right. The second question is in regards to gain. So I -- if -- maybe you have shared it earlier, but what was the full year DNB excess costs you paid for FY '25?
Ahmad Bin Rahim: No, we have not actually declared any DNB excess cost. And -- yes.
Joe Liew: All right. Okay. But then the last question for me would be -- last 2, CapEx guidance for the year. I think CapEx has raised from 16% to 18% to 20%. I just want to know where will the increase be coming from.
Ahmad Bin Rahim: So our CapEx, we will remain actually committed to actually continue to expand our network capacity and reach. But bulk of the investment also will cover our submarine cable investment, yes.
Joe Liew: This CapEx, does it include the TM Nxera CapEx? Or this...
Ahmad Bin Rahim: We don't consolidate actually TM Nxera, yes. Yes.
Delano Kadir: Do we have time for maybe one more question from anyone else? Okay. With that, thank you very much, everyone, for joining us today. And we will see you in the next quarter. Again, if you have any other questions, please feel free to drop myself or the IR team line. Thank you very much.
Amar Bin Md Deris: Thank you. Thank you very much.