Singapore-based mobile operator Singtel recorded continued weakness in its fiscal Q4 ending 31 March, with profit dropping sharply and revenue flat as its operations in India, Indonesia and its home market experienced declines.
The operator, the largest in Singapore with a 49 per cent market share, reported a 19 per cent year-on-year drop in net profit to SGD781 million ($582 million) due to weaker results from Airtel and Telkomsel, and adverse currency movements. Pre-tax earnings from Singtel’s regional operations fell 24.9 per cent to SGD488 million.
Group operating revenue slipped 0.4 per cent during the quarter from a year ago to SGD4.33 billion. Consumer revenue dipped 1.8 per cent to SGD2.41 billion, with mobile turnover falling 3.4 per cent to SGD1.46 billion. The company said mobile revenue was stable in constant currency terms. Growth in data was offset by lower voice usage and a shift to SIM-only plans.
The company said in a statement Airtel’s results were impacted by intense competition with aggressive pricing led by Reliance Jio and further aggravated by mandated cuts in mobile termination rates in India. Earnings dropped despite Airtel recording its highest quarterly net customer adds and strong data usage growth.
Telkomsel’s earnings were impacted by a decline in legacy services and heightened price competition.
Profit contribution from AIS in Thailand increased on revenue improvement and cost management. Globe also delivered strong earnings growth due to rising data revenue and cost control.
Chua Sock Koong, Singtel Group CEO, said its Australian unit Optus gained market share, underscoring its network and content strategy. The group’s ICT and digital businesses accounted for 24 per cent of revenue, and its digital marketing arm Amobee achieved growth and positive EBITDA for the year.
In Singapore, mobile revenue fell 5.7 per cent year-on-year to SGD302 million, impacted by voice to data substitution, declines in roaming services and a higher mix of SIM-only plans. Equipment sales fell 4.1 per cent to SGD77 million.
Its mobile subscribers fell by 1.7 per cent year-on-year to 4.09 million at end-March, and blended ARPU was down 4.3 per cent to SGD44.
Optus’ mobile revenue inched up 0.8 per cent to AUD927 million ($698 million), and equipment sales jumped 22.6 per cent to AUD386 million. Its mobile subscriber base grew 3.9 per cent over the fiscal year to end March at 10.1 million. Blended ARPU fell 1.9 per cent to AUD33, which the company said was a result of an increased mix of SIM-only plans, higher device repayment credits and data price competition.
Operating revenue at Singtel’s Digital Life business surged 62 per cent from Q4 2017 to SGD205 million in the recent quarter and EBITDA was at breakeven, lifted by one-off content cost credits and government grants. Amobee’s earnings improved as it leveraged increased scale and synergies with marketing platform Turn, which it acquired in April 2017. Its mobile video streaming service HOOQ narrowed its loss with lower content costs from renegotiation of content contracts.
For its full fiscal year, the group’s net profit rose 41.5 per cent to SGD5.45 billion, a record for the company, which it said was driven by gains from the divestment of NetLink Trust and a strong performance by its core business. Revenue rose 5 per cent to SGD17.53 billion.
Operating revenue in its core business is expected to increase slightly in the year to end-March 2019, with mobile service revenue increasing at a low single-digit figure in Australia and mid single-digit in Singapore. Capex is expected to reach SGD2.2 billion, comprising AUD1.4 billion for Optus and SGD800 million for the rest of Singtel Group.