Singtel reported weak profit and revenue growth in fiscal Q4, as a decline in mobile service turnover weighed on its financials despite double-digit gains in equipment sales across the company.
The group’s net profit for the quarter ending 31 March edged up 0.4 per cent year-on-year to SGD773 million ($565 million), with operating revenue up 1.9 per cent to SGD4.34 billion. The share of its regional associates’ pretax profit, excluding exceptional items, dropped 20 per cent to SGD389 million.
For its full fiscal year net profit fell 44 per cent to SGD3.1 billion, mainly due to an exceptional gain the previous fiscal year from the divestment of 75 per cent of NetLink Trust, with its underlying net profit declining 21 per cent on losses from Bharti Airtel; lower contributions from Telkomsel in Indonesia; and currency fluctuations.
Singtel CEO Chua Sock Koong said intense competition affected the markets in India and Indonesia: “Airtel is strengthening its balance sheet with capital raising now in progress. We continue to be optimistic about the growth potential of our associates’ markets, with the rate of data usage growth and the plethora of digital content and services available and carried over the mobile networks.”
Mobile service revenue across the group fell 6.2 per cent to SGD1.3 billion: equipment sales rose 13.3 per cent to SGD711 million.
Broken down by business group, consumer revenue grew 2.4 per cent year-on-year in the quarter to SGD2.44 billion, while the Digital Life unit posted 33.4 per growth to SGD274 million. Enterprise revenue fell 2.7 per cent to SGD1.63 billion, which it said was due to Optus Business recording a double-digit decline in fixed voice and a significant slowdown in customer spending, especially in the government and financial sectors.
A 7 per cent depreciation in the Australian dollar also slowed the group’s revenue growth.
Operating revenue for the consumer group rose 1.1 per cent to SGD541 million, with a 16.5 per cent increase in equipment sales to SGD143 million offsetting a 2.1 per cent drop in mobile service turnover to SGD249 million, which it credited to lower voice revenue and a higher mix of SIM-only plans.
Singtel added 120,000 post-paid subs to end March with 2.57 million: prepaid subs fell 1.2 per cent to 1.62 million. LTE penetration reached 75 per cent.
Post-post ARPU declined 9 per cent to SGD41, while prepaid ARPU was down 7 per cent to SGD17.
Its Australian mobile unit posted a 10.4 per cent increase in operating revenue in the quarter to AUD1.9 billion ($1.3 billion), with mobile service revenue flat at AUD912 million and equipment sales rising 24.9 per cent to AUD486 million.
The operator said post-paid customer growth offset lower ARPU from increased competition: its base grew 7.1 per cent year-on-year to 5.68 million at end-March. Prepaid subs fell 7.8 per cent to 3.42 million, which it said was mainly due to a deactivation push of inactive customers by a major wholesale customer.
Post-paid ARPU declined 3 per cent to AUD42, while prepaid ARPU was down 8 per cent to AUD18.
Optus said it expanded its 4G network to 7,368 sites covering 97.3 per cent of the Australian population.
Singtel’s outlook for the next financial year forecasts group revenue to grow by a mid-single-digit rate and capex to reach SGD2.2 billion, with nearly 64 per cent allocated to Optus.Subscribe to our daily newsletter Back