SingTel posted a sharp increase in net profit in the last quarter, with strong contributions from its minority stakes in Airtel and Globe Telecom and steady growth in the mature and wholly-owned Singapore and Australia markets.

The operator’s net income increased 19.3 per cent to SGD1.04 billion ($804 million) for its fiscal Q2 ending 30 September, its highest in ten quarters. A 3.5 per cent increase in revenue to SGD4.31 billion was driven by consistent growth across all of its business units, including mobile, broadband, digital services and enterprise.

Its regional mobile units’ pre-tax earnings increased 26 per cent to SGD629 million, with strong growth from Bharti Airtel (in which it holds a 32.4 per cent stake). Airtel’s earnings surged 122 per cent to SGD203 million, while Globe’s (47.3 per cent ownership) rose 36 per cent to SGD77 million. Telkomsel’s (35 per cent stake) profit fell 2 per cent to SGD247 million, but was up 10 per cent in local currency terms. Revenue from the mobile units increased 7.3 per cent.

The group’s consumer business, which accounts for 61 per cent of the company’s total revenue, continued to have steady growth, with overall revenue up 2.2 per cent to SGD2.63 billion.

Singapore led the consumer growth with revenue rising 3.8 per cent to SGD588 million thanks in part to migrating many ADSL customers to fibre broadband. The number of fibre customers expanded 6.3 per cent to 369,000. The company said household ARPU in Singapore rose 11 per cent to SGD61. Its 4G subscriber base increased by 203,000 from the previous quarter to 1.48 million. Postpaid ARPU was down 5 per cent to SGD75.

SingTel is Singapore’s leading mobile operator with 50 per cent market share and four million mobile connections.

Optus in Australia returned to growth, with a 2.1 per cent increase in consumer revenue. Mobile revenue was up 4 per cent to AUS1.39 billion ($1.2 billion) as new data plans led to a 7 per cent jump in data revenue. Postpaid ARPU fell 2 per cent to AUD60 while prepaid ARPU rose 9 per cent to AUD27.

Digital Life
SingTel has been trying to move beyond being a pure-play telco company by expanding its ‘Digital Life’ segment, which includes mobile video and digital advertising.

In its Digital Life group, Amobee fully acquired Kontera and Adconion in July and August 2014 respectively. Operating revenue rose by 142 per cent to SGD85 million. Ongoing start-up costs and investments in new businesses resulted in negative EBITDA of SGD50 million. Excluding the digital acquisitions, EBITDA would have been up 7 per cent to SGD43 million.

Enterprise
Its enterprise group’s operating revenue rose 3.3 per cent to SGD1.59 billion and now accounts for 37 per cent of the group’s total.

Operating expenses increased during the quarter 4.2 per cent to SGD3.01 billion.

EBITDA rose 2.7 per cent to SGD1.33 billion. Excluding an exceptional net gain of SGD59 million, which included a SGD$65 million gain from the dilution of 2.2 per cent of the group’s equity interest in SingPost, its profit was up 10.8 per cent to SGD979 million. Its EBIDTA margin fell from 31.2 per cent last year to 30.9 per cent.

The company will pay an interim dividend of SGD0.68 per share, which represents 58 per cent of underlying earnings for the first half-year.

Outlook
In its guidance for the fiscal year ending 31 March, the company expects capex to hit SGD2.3 billion (SGD900 million for Singapore and the rest for Australia). Mobile revenue in Singapore is forecast to increase by a mid single-digit figure while mobile service revenue will fall in Australia by a low single-digit number.