Singtel's mixed second quarter dragged lower by Australia

The Singaporean telco giant's local performance was steady, with its Indonesian and Indian associates growing by double digits, but overall it was pulled lower by Optus.

Singtel has presented mixed results for its second quarter results, with its operating revenue dropping by 2 percent to SG$4.1 billion, earnings before interest, tax, depreciation, and amortisation (EBITDA) falling 4 percent to SG$1.2 billion, and underlying net profit being stable at SG$978 million.

The Singaporean telco giant said it would have posted a 2 percent increase in revenue if it had not been for lower mobile termination rates and the launch of Optus Sport in Australia.

For the half-year, revenue dropped 5 percent to SG$8 million and EBITDA declined 2.5 percent to SG$2.5 billion.

In its local Singapore market, Singtel posted SG$576 million in consumer revenue, with equipment sales falling 20 percent due to the popularity of low cost Android hansets and SIM-only plans, as well as the pending release of new handsets. Consumer EBITDA fell 1 percent to SG$202 million.

On the island nation, Singtel now has 2.5 million 4G customers, and saw postpaid average revenue per user drop 6 percent to SG$69 a month. Although it has seen its residential Singtel TV customers decline by 10,000 in the last year, TV is now contributing SG$63 million in revenue, an increase of SG$7 million on the same quarter last year.

From its 35 percent stake in Indonesia's Telkomsel, Singtel gained SG$365 million in profit before tax, representing a 22 percent jump. Singtel's 33 percent share of India's Airtel saw the Singaporean telco gain SG$172 million in EBITDA for the second quarter, a rise of 13 percent. In Thailand, Singtel's AIS stake delivered SG$83 million in pre-tax profit, a decline of 19 percent. Filipino telco Globe contributed SG$59 million in profit before tax to Singtel, a 25 percent collapse.

"Our associates especially Telkomsel and Airtel performed strongly," Singtel CEO Chua Sock Koong said in a statement. "Strategic investments in networks and spectrum are paying off as they capture new growth in customers and data usage. The group's customer base increased by 3 percent to 629 million subscribers, further strengthening our position as South East Asia's largest communications company."

From its enterprise group, Singtel received SG$1.6 million in revenue for the quarter, an increase of 5 percent on the same time last year, which was mostly due to the inclusion of its Trustwave acquisition. The group posted SG$502 million in EBITDA for the quarter, a 2 percent fall year-on-year.

In Australia, Singtel's Optus subsidiary said in its quarterly results that revenue had fallen by almost 9 percent for the quarter compared to the same time last year to AU$2.1 billion, and EBITDA dropped by 10 percent to AU$633 million.

Looking forward, Singtel said it expects its revenue to fall by low single digits and for EBITDA to remain stable.

During 2016, Singtel has teamed up with Ericsson to trial narrowband networks for IoT, and conducted a live trial of indoor 4G that is expected to result in 450Mbps throughput speeds.

In February, the company also launched 10Gbps fibre broadband services priced at SG$189 a month.

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