Singtel cites headwinds in first half results

08 NOV 2018

Singtel described its fiscal first half results as resilient, although its bottom line was hit by lower contributions from Airtel (India) and Telkomsel (Indonesia).

While revenue of SGD8.4 billion ($6.1 billion) in the six months to end-September was down slightly year-on-year, the operator said that at constant currency it recorded a 3 per cent increase. Net profit of SGD1.5 billion was down 60 per cent, although the prior-year period included a gain on the partial sale of its NetLink Trust stake.

For its fiscal Q2 (calendar Q3), revenue of SGD4.3 billion was essentially flat, while profit of SGD667 million was down 77 per cent.

Excluding exceptional items, half-year underlying profit decreased 21 per cent to $1.4 billion, which was attributed to the performance of the two affiliates and foreign exchange movements.

At home, mobile revenue at its Consumer unit increased 7 per cent on strong equipment sales, as the launch of new premium devices was used to drive customer acquisition and retention. It added 41,000 contract customers, the strongest performance in six quarters, and churn was reduced.

But mobile service revenue continued to be impacted by the erosion of voice revenue, partially mitigated by the growth of data and digital lifestyle services.

Airtel’s numbers in India were impacted by “intense competition and mandated cuts in mobile termination rates”, although it noted ARPU was stable on a sequential basis. Telkomsel’s figures were hit by lower voice and SMS revenue, as well as price competition during a mandatory SIM card registration period: after this, some price rises were implemented in selected areas.

Elsewhere, Singtel noted strong performances from Globe in the Philippines and Airtel Africa, the latter of which raised new equity including $250 million from Singtel ahead of an IPO.

It also said that AIS in Thailand recorded higher depreciation associated with its 4G network expansion.

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Steve Costello

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