TM reported a loss for 3Q2008

TM has just announced its results for 3Q2008 ended 30/9/2008, where it recorded a pre-tax loss of RM138 million on a turnover of RM2.06 billion. This compared to a pre-tax profit of RM129 million on a turnover of RM11 billion achieved on 2Q2008. The losses was attributable mainly to unrealized forex losses of RM196 million & a forex translation loss of RM89 million, realized on disposal of Sotelgui (Republic of Guinea).

As a result of these exceptional items, TM reported a loss after tax & minority interest of RM166 million for 3Q2008. If the exceptional items were excluded, TM would have reported a profit after tax & minority interest ('PATMI') of RM176 million. Based on the PATMI of RM176 million for 3Q2008, TM's full year PATMI would be about RM704 million. This will yield a full-year EPS of 20 sen.

TM's share price dropped 50 sen to close at RM2.80 in the morning session. At this price of RM2.80, TM is now trading at a PE of 14 times. In addition, TM is also trading at a Price to Book of 0.9 times (based on its NTA of RM3.00 per share as at 30/9/2008). At these multiples, TM is deemed quite attractive.

Chartwise, TM has broken below its medium-term uptrend line support of RM2.90. Thereafter, we can see horizontal support at RM2.80 & RM2.70.


Chart: TM's weekly chart as at Nov 11, 2008 (source: Quickcharts)

Based on attractive valuation, TM could be a good long-term BUY. However, its recovery may take a while since the share price has broken below its uptrend line.