This article was originally published on Thursday, 8 August 2019 at 8:03 A.M. SGT; it has since been updated to add more details.
Singtel posted Thursday its fiscal first quarter net profit dropped 34.9 percent on-year to S$541 million on losses from Airtel and higher depreciation and amortization for network and spectrum across the group.
Revenue for the quarter ended 30 June slipped 0.5 percent on-year to S$4.11 billion, the telco said in a filing to SGX.
Underlying net profit, which excludes exceptional items, declined 21.6 percent on-year to S$575 million, Singtel said.
Excluding Airtel, underlying net profit and net profit would have fallen 2.9 percent and 3.4 percent respectively, the filing said. Airtel reported a loss before tax of S$162 million.
Pre-tax earnings from regional associates fell 14 percent on-year due to Airtel’s higher network costs, depreciation and finance charges from its 4G network expansion, Singtel said, adding that excluding Airtel, regional associates’ contributions would have risen by 10 percent, led by an 18 percent earnings increase at Telkomsel in Indonesia.
“The Airtel impact aside, business is stable as we continued to execute to strategy in the first quarter. We added postpaid mobile customers in Singapore and Australia and grew our digital businesses Amobee and Trustwave. This was achieved against a backdrop of heightened competition, sustained industry headwinds and subdued economic growth,” Chua Sock Koong, Singtel CEO, said in the statement.
“We are focused on the digitalisation of our core communications business where innovations in digital products and services are proving to be key differentiators, leveraging our network superiority. We are also driving productivity gains and cost savings through digitalisation,” she added.
The consumer group reported operating revenue rose 0.6 percent on-year to S$2.37 billion, while earnings before interest, tax, depreciation and amortization (EBITDA) increased 0.6 percent on-year to S$799 million, the filing said.
The consumer group includes the consumer business in Singapore and Australia and investments in AIS and Intouch in Thailand, Airtel in India, Africa and Sri Lanka, Globe in the Philippines and Telkomsel in Indonesia.
“Competition in the Singapore mobile market continued its intensity with entry of new Mobile Virtual Network Operators (MVNO) and launch of all-digital brands by mobile operators. Against this challenging backdrop, operating revenue for Singapore Consumer declined
5.1 percent,” Singtel said.
The enterprise group reported operating revenue fell 5.1 percent on-year in the quarter to S$1.44 billion, while EBITDA declined 7 percent on-year to S$417 million. That was due to an adverse impact from Optus Business on lower voice usage, price erosion and weaker demand from the government and financial sectors, Singtel said.
The enterprise group provides services including mobile, equipment sales, fixed voice and data, cybersecurity and cloud computing, the filing said.
In its outlook, Singtel said it continued to expect consolidated EBITDA, excluding NBN migration revenue, to increase by a high single digit percentage.
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