CAHYA MATA SARAWAK ANNUAL REPORT 2016

A N N U A L R E P O R T 2 0 1 6 Section 03 P E R F O RMA N C E 2 0 1 6 29 Cahya Mata Sarawak Berhad REVENUE PROFIT BEFORE TAX FY2016 RM 194.77 million FY2016 RM 98.20 million In FY 2016, SACOFA maintained its strong earnings with revenue totalling RM194.77 million and PBT amounting to RM98.20 million. The year also saw SACOFA introducing a revitalised brand and logo in conjunction with its 15 th anniversary. SACOFA continued to play a key role in developing Sarawak’s infrastructure through assisting the Ministry of Public Utilities achieve its ambitious target of 95% broadband penetration over the next five years. The penetration rate currently stands at 53%. To date, SACOFA has constructed over 1,000 towers with more than 10,000km of fibre optic cabling in place. These activities were undertaken with proper planning and with due consideration given to the preservation of the natural surroundings. SACOFA has today submitted a comprehensive plan to the authorities to fiberise all remote and underserved areas at a cost of approximately RM0.50 billion while committing to spend an additional RM0.50 billion to further enhance its existing network across the State. A significant highlight in FY 2016 was the signing of an agreement with U Mobile Sdn Bhd granting SACOFA exclusive rights to construct, own and manage communication infrastructure in Sarawak to help in its expansion plans for the State. As part of the agreement, SACOFA will deliver built-to-suit sites and provide bandwidth leasing and 4G/LTE expansion services to U Mobile over a period of 10 years. U Mobile will leverage on SACOFA’s extensive infrastructure of over 1,000 towers for a faster and cheaper rollout. SACOFA is well-positioned and ready to serve as an enabler for telecommunication service providers seeking to widen the reach of their mobile and data services in the State. Another notable highlight in FY 2016 was the signing of an agreement with YTL to build 210 towers and use another 90 existing towers for the 1BestariNet rollout of 4G/LTE to schools in Sarawak by mid-2017. SACOFA was also involved in the Tanjung Manis SCORE Tower Project which included erecting 10 towers and related infrastructure to enhance the development of the Tanjung Manis Halal Hub and draw in greater investment. The bridging of the digital divide initiative is an ongoing programme by SACOFA to strengthen telecommunication penetration in the rural areas. In relation to this, FY 2016 saw SACOFA successfully constructing 60 small cell sites and commissioning backhaul services to T3 USP sites in Sarawak in tandem with the Malaysian Communications andMultimediaCommission (MCMC).Inaddition,SACOFA had completed the 4G/LTE ready fibre network to Limbang and Lawas in collaboration with DST Communications Sdn Bhd of Brunei. SACOFA is also involved in the SEA Cable Exchange-1 (SeaX-1) Project. Encompassing a 250km high-speed, large capacity, 24-fibre pair undersea fibre optic cable, this initiative will connect Mersing in Malaysia, with cable landing stations located at Changi in Singapore and Batam in Indonesia. Super SEA Cable Networks Pte Ltd has selected Huawei Marine Networks to deploy the new subsea cable system connecting the eastern seaboard of Peninsular Malaysia with Singapore and Indonesia. SACOFA and its affiliate company in Indonesia, PT Super SistemUltima, will undertake the cable landings inMalaysia and Indonesia respectively. Being a responsible concession holder, SACOFA has added four new locations offering free internet services as part of its ongoing community outreach initiative. This brings the total number of locations to eight. Moving forward, the Company will continue to work with the MCMC, as well as the State and Federal Governments in support of the Sarawak Rural Transformation Programme to improve connectivity in the hinterland and rural communities. Going forward, the plan is to roll out more than 100 towers in 2017 with a continued focus on strong organic growth as the network is expanded and fiberised. MANAGement DISCUSSION AND ANALYSIS