Singtel’s net profit rises 11%, but subsidies push down EBITDA

SingTel’s net profit rises 11%, but subsidies push down EBITDA

13 FEB 2015

SingTel reported strong revenue growth across all markets, but higher handset subsidies and unfavourable forex movements pushed its EBITDA lower in fiscal Q3.

The operator’s net profit in its fiscal Q3 ending 31 December grew 11 per cent to SGD970 million ($714 million) despite a weaker Australian dollar and operating losses from its digital investments.

But EBITDA was down by 2.8 per cent to SGD1.23 billion, with handset subsidies raising customer acquisition costs but increasing re-contract volumes in its Singapore consumer business.

The company’s revenue increased 4 per cent to SGD4.43 billion, benefitting from mobile customer growth in all markets, higher equipment sales and revenue from its recent digital acquisitions. In constant currency terms, it said revenue would have grown 7 per cent.

SingTel expanded its 4G base in Singapore and Australia, with 4G penetration reaching 37 per cent and 34 per cent, respectively – up almost 15 percentage points in both markets over the past year.

Its regional mobile associates’ pre-tax earnings rose 28 per cent to SGD646 million during the quarter, led by its units in Indonesia and India, where it has minority interests.

Growth in all markets
Telkomsel’s profit before tax (PBT) grew 28 per cent to SGD273 million, Airtel’s increased 37 per cent to SGD202 million, while AIS in Thailand saw PBT rise 7 per cent to SGD113 million. Globe Telecom in the Philippines posted the highest growth, with PBT expanding 48 per cent to SGD57 million.

In its home market of Singapore, where it has almost a 50 per cent share of mobile connections, consumer revenue increased 7 per cent to SGD651 million, with higher equipment sales and TV revenue (up 21 per cent).

Equipment sales grew 37 per cent due to more customers upgrading to smartphones and more costly tiered plans. This boosted subscriptions and data revenues, offsetting lower voice and SMS usage.

But mobile revenue in Singapore, however, was up only 2 per cent to SGD553 million and postpaid ARPU dropped 3 per cent to SGD76. It added 181,000 4G customers in the last quarter, raising its total to 1.66 million. About 37 per cent of its 4.1 million customers have 4G connections – up from 22 per cent a year ago.

It said 59 per cent of postpaid customers are on tiered plans and 21 per cent exceed their data bundles.

SingTel’s enterprise business grew 3 per cent to SGD1.55 billion.

Consumer revenue in Australia grew 7 per cent to AUD1.9 billion, led by customer gains and higher ARPU. Optus added 96,000 mobile handset customers with the launch of data sharing plans like My Plan Plus and new prepaid offers. Blended ARPU rose 5 per cent, with data revenue up 12 per cent.

Optus, Australia’s number two operator with a 31 per cent market share, ended the year with 3.1 million 4G customers, giving it a 4G penetration of 34 per cent.

With the release of the 700MHz spectrum on 1 January, Optus said it is now speeding up its 4G network rollout and aims to have 90 per cent population coverage by April, up from the current 80 per cent.

For its full fiscal year ending 31 March SingTel forecasts stable overall revenue and low single-digit growth in EBITDA. It expects a mid single-digit increase in mobile revenue in Singapore and low single-digit growth Australia.


Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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