Singapore’s smallest mobile operator M1 reported a drop in net profit and operating revenue for Q2 as handset sales plunged by half from a year ago.
The operator’s net profit for the period fell 7.5 per cent to SGD41 million ($30.4 million), which it attributed to higher depreciation and amortisation expenses from a higher fixed asset base for its expanded 4G network. EBITDA was down 1.7 per cent to SGD82.2 million.
Operating revenue dropped 13.2 per cent to SGD240.4 million, with handset sales falling 50 per cent to SGD36.4 million from a year ago. Service revenue was unchanged from a year ago at SGD204 million, but mobile service revenue declined 2.2 per cent to SGD163 million. Postpaid revenue decreased 1.6 per cent to SGD145 million, while prepaid turnover was down 6.8 per cent to SGD18 million.
Postpaid ARPU declined 3.5 per cent to SGD59.90 and prepaid ARPU was down 17.4 per cent SGD12.30.
Over the past year, its user base rose 5 per cent to 1.98 million, although it is still behind rivals Singtel and StarHub. Its mobile market share was stable at 23.5 per cent.
Average postpaid smartphone data usage was 3.3Gb per month in Q2, up slightly from 3.2Gb a year ago. Average prepaid data usage grew to 1.3Gb per month from 1Gb a year ago. Mobile data accounted for 54 per cent of service revenue in Q2, up 9 percentage points year-on-year.
Fixed service revenue grew 27 per cent to SGD25.6 million and accounted for nearly 16 per cent of service revenue. The increase was driven by the addition of 9,000 residential and corporate fibre customers in the quarter, bringing its base to 145,000.
Operating expenses were down 14 per cent to SGD191 million during the quarter from a year ago.
Capex for the first half of the year was SGD72.4 million compared with SGD65.1 million for 1H 2015. Its capital commitment as of 30 June was SGD72.8 million, with SGD64 million committed for 4G spectrum rights.
M1 is forecasting a single-digit decline in net profit for the full year.