Singtel’s Q1 profit flat despite fall in revenue - Mobile World Live

Singtel’s Q1 profit flat despite fall in revenue

15 AUG 2016

Singtel managed to post a fiscal Q1 net profit nearly unchanged from a year ago despite a sharp drop in consumer revenue in its two key markets – Singapore and Australia.

The regional operator cut expenses by almost 10 per cent and saw strong growth in earnings from many of its mobile units.

Singtel’s net profit for the quarter ending 30 June nudged up 0.3 per cent to SGD944 million ($704 million), which it said was lower than expected due to exceptional gains a year ago. The depreciation of the Australian dollar impacted its EBITDA, which edged down 0.4 per cent to SGD1.24 billion.

Group revenue dropped 7.1 per cent to SGD3.9 billion, which the operator credited to a sharp fall in mobile termination rates (MTR), device repayment plan (DRP) credits in Australia and equipment sales in Singapore and Australia.

Operating expense decreased 9.2 per cent to SGD2.73 billion. Selling and administrative expenses were down nearly 4 per cent due to lower customer acquisition and retention costs across Singapore and Australia, while traffic expenses dropped 37 per cent on lower rates (including MTR) as well as a decline in international call and roaming traffic.

Its regional mobile associates’ pre-tax earnings expanded 14 per cent to SGD714 million, with strong profit growth at Telkomsel in Indonesia (31 per cent), Airtel in India and AIS in Thailand (both up 10 per cent in local currency terms).

Consumer revenue across the group decreased 16 per cent to SGD2.2 billion, with strong mobile data growth not able to offset declines in voice and roaming.

Consumer revenue in Singapore was down 8.5 per cent to SGD558 million, as equipment sales fell 45 per cent due to lower recontracting and a higher mix of SIM-only plans, and IDD revenue dropped 19 per cent. Mobile turnover was down 1.4 per cent to SGD323 million. Postpaid ARPU slipped 5 per cent to SGD70.

Its Optus unit in Australia saw consumer revenue decrease 15 per cent to AUD1.62 billion as MTR revenue dropped by AUD185 million, DRP credit fell by AUD75 million and equipment sales were down by AUD49 million (or 16 per cent year-on-year). Postpaid handset ARPU fell 19 per cent to AUD48, while prepaid handset ARPU dropped 25 per cent to AUD21.

Regional units
Telkomsel’s operating revenue was up 15 per cent year-on-year, with data usage growing 45 per cent and continued strong take up of smartphones. Voice revenue grew 8 per cent.

On a post-tax basis, Telkomsel’s profit contribution for the quarter increased 31 per cent to SGD244 million, accounting for 26 per cent of the group’s underlying net profit, up from 21 per cent a year ago.

Airtel’s operating revenue grew 10 per cent, which was driven by a 55 per cent jump in mobile data growth on higher usage and brisk mobile customer growth. Data ARPU increased 12 per cent. Airtel added 4.5 million mobile customers in India last quarter.

AIS’ (Thailand) service revenue (excluding interconnect) was stable, while its post-tax profit contribution for the quarter increased 5.1 per cent to SGD98 million, contributing 10 per cent of the group’s underlying net profit, unchanged from a year ago.

Globe Telecom in the Philippines reported an 8 per cent rise in service revenue, which was driven mainly by strong growth in data related services across mobile, home broadband and corporate businesses. It contributed SGD64 million or 7 per cent of the group’s underlying post-tax net profit – the same as a year ago.

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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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