Singtel Q1 profits crashed 35% to $541.1m in Q1
Higher network costs, depreciation and finance charges dragged on Airtel’s operations.
Singapore Telecommunications’ (Singtel) profits slid down 35% YoY to $541.1m from $831.5m in Q1, no thanks to Airtel’s losses and higher depreciation and amortisation costs in network and spectrum across the group.
The telco’s overall pre-tax earnings contributions also fell 14% YoY to $722.2m from $1.06b over the same period. Losses in Airtel operations was blamed on higher network costs, depreciation and finance charges from its 4G network expansion. Profit declines were offset by Telkomsel in Indonesia, which posted an 18% climb in earnings on robust growth in data and digital services.
Meanwhile, Singtel’s operating revenue rose 2% to $4.11b from $4.13b, supported by growth in its consumer segment in Australia as well as its digital businesses.
Mobile revenue for Singtel’s consumer segment in Singapore was stable. Higher equipment sales offset the decline in local and roaming voice services.
The telco’s postpaid customers grew 35,000 in Q1 with strong demand for its all-digital, no-contract, SIM-only mobile plan GOMO.
Revenue from fixed services was down 3%, and operating expenses slipped 6% from strong cost management mainly through digitalisation. However, lower voice revenue resulted in a 4% decline in EBITDA.
Meanwhile, Singtel’s operations in Australia saw revenue rise 8%, led by growth in NBN migration revenue, equipment sales and handset leasing. EBITDA was up 9% as well. However, its mobile service revenue declined 7% from lower average revenue per user (ARPU) due to an increased mix of SIM-only customers and heightened data price competition.
However, the decline in Optus’ volumes paired with continued pressure on carriage services has dragged on the group’s enterprise segment, causing revenue to slide 5%. Optus was impacted by weak demand from the government and financial sectors, and a large ICT contract in Q1 2018.
NCS revenue rose 8% whilst its order book remained healthy at $2.9b.
Group enterprise EBITDA was down 7%, mainly a result of carriage erosion and price reduction on major government ICT contracts.
On the other hand, Singtel’s digital life’s revenue climbed up 17%, driven by the continued growth in Amobee’s programmatic advertising business and contributions from its mobile video streaming service HOOQ.