M1 2Q18 net profit rose slightly amid higher post-paid and fixed-service revenue

M1 location in Singapore Geylang neighbourhoodM1 location in Singapore’s Geylang neighbourhood

Singapore telecom M1 reported on Friday second-quarter net profit rose 1.5 percent on-year to S$36.2 million as post-paid and fixed-services revenues increased.

Service revenue rose 5.2 percent on-year in the quarter to S$193.0 million, as postpaid revenue rose 5.7 percent to S$132.6 million and fixed-services revenue increased 27.4 percent on-year to S$36.7 million amid strong growth across both corporate and residential segments, it said in a filing to SGX after the market close on Friday.

The net profit margin on service revenue fell to 18.8 percent in the quarter from 19.4 percent in the year-earlier period, it said.

Mobile data’s contribution increased to 64.4 percent of service revenue, up from 55.3 percent in the year-ago quarter, it said.

In the quarter, M1 added 34,000 postpaid customers, bringing the postpaid base to 1.34 million at 30 June, with monthly postpaid churn  stable on-year at 1.0 percent, it said.

It declared a 5.2 Singapore cent dividend for the period, flat with the year-earlier level, it said.

For the first half, net profit rose 0.8 percent to S$71.0 million, it said.

Maybank KimEng forecast in an early July note that net profit for the full year would be S$127.8 million.

The outlook guided for lower profit for the second half of the year.

“Based on current outlook and barring any unforeseen circumstances, we estimate second half profits to be lower in view of market seasonality and impending new competition,” M1 said.

In the outlook, CEO Karen Kooi said M1 had begun early multi-vendor 5G trials, including the city-state’s first end-to-end 5G live trial in June.

“This could provide insightful learning crucial to the successful development of relevant 5G services,” she said.

She added that Smart Nation initiatives would also accelerate digitalisation.

“By leveraging on our scaled up ICT and digital capabilities, we will be able to capture new opportunities from Smart Nation initiatives and support businesses to leverage digital technologies,” she said.

Get Shenton Wire headlines in your inbox