Singtel posts fiscal 1Q net profit fell 6.6 percent amid headwinds in India, Indonesia

SingTel outlet in SingaporeSingTel outlet in Singapore

Singapore Telecommunications reported on Wednesday that its fiscal first quarter net profit fell 6.6 percent on-year to S$832 million, due to a year-earlier exceptional gain and amid headwinds in Indian and Indonesian operations.

In the year-earlier quarter, Singtel saw a net exceptional post-tax gain of S$98 million due to the disposal of a property in Singapore and a share of Airtel’s net exceptional gains, partially offset by staff restructuring costs, it said in a filing to SGX before the market open on Wednesday.

Underlying net profit fell 19 percent on-year in the quarter ended 30 June to S$733 million on weaker results from Airtel and Telkomsel, reduced economic interest in NetLink NBN Trust, an increase in withholding taxes from higher dividends and adverse currency movements, it said.

Operating revenue fell 0.5 percent on-year in the quarter ended 30 June to S$4.134 billion, although it would have risen 2 percent in constant currency terms, Singtel said.

“This quarter’s results reflect the resilience of our core business against intense competition and increasing business headwinds. The group continued to record data growth and Optus made gains in both the consumer and enterprise markets, bolstered by our quality networks, differentiated content and comprehensive ICT capabilities,” Chua Sock Koong, Singtel group CEO, said in the statement. “Our overall focus on digitalisation and automation has also improved customer engagement and delivered productivity gains and cost savings,” she added.

Optus operations

Optus reported operating revenue rose 5.7 percent on-year in the fiscal first quarter to A$2.178 billion, driven by customer growth following investment in networks, technology and content. Optus also benefited from football as part of its content strategy, extending its exclusive Australian rights to Premier League for another three seasons to 2022 and obtaining exclusive rights to a range of European International foot ball through 2022, it said.

Optus net profit for the quarter fell 3.5 percent on-year to A$154 million, it said.

Singapore operations

In Singapore, mobile service revenue fell 4 percent amid an ongoing voice to data substitution and an increased mix of SIM-only plans, partially offset by “robust” data growth from the take-up of data add-on and data-roaming plans, Singtel said.

Singapore also saw the take-up of higher-tier broadband plans and value-added services, as well as S$15 million in revenue from the 2018 FIFA World Cup, it said.

Post-paid ARPU, or average revenue per user, fell 5 percent on-year to S$46, while prepaid ARPU was stable at S$19  as higher data usage offset the voice decline, Singtel said.

Airtel and Telkomsel

Regional associates reported a 42 percent on-year decline in profit before tax excluding exceptional items to S$391 million amid a lower contribution from Airtel and Telkomsel, Singtel said.

But at Airtel, it posted a loss before tax of S$63 million as Indian mobile revenue declined on-year, offset by continued strong revenue growth in Africa, Singtel said.

Telkomsel reported a 38 percent decline in profit before tax to S$237 million in the quarter amid price competition and mandatory registration of pre-paid SIM cards, it said.

“While competition remains keen in Indonesia and particularly India, both Telkomsel and Airtel have nonetheless gained market share. We have started to see revenue stabilise on a sequential quarter basis for India,” Chua said.

AIS profit before tax for the quarter rose 14 percent on-year to S$94 million on robust earnings growth on revenue improvement and cost management, it said.

There was no interim dividend declared, unchanged from the year-earlier period.

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