Optus returns to net profit with revenue down for first half

A 10% jump in mobile service revenue, and increasing average user spend has seen Optus return to profitability.
Written by Chris Duckett, Contributor

Optus has recorded AU$35 million in net profit for the first half to September 30, recording a AU$58 million turnaround on last year's AU$23 million loss, but it's still a long way short of the AU$235 million posted in 2019.

The Singaporean-owned telco recorded a 3.5% drop in revenue to AU$3.9 billion, and expenses dropped 6.5% to AU$2.9 billion to leave AU$1 billion in earnings before interest, tax, depreciation, and amortisation (EBITDA), up 6%, and a doubling of EBIT to AU$145 million once depreciation and amortisation were taken into account.

On the income tax front, the telco paid AU$13 million compared to a AU$10 million benefit last year. As of September 30, the company had 6,753 employees, a drop of 4.3%.

In its mobile sector, overall revenue was up 3% to AU$2.5 billion, with service revenue consisting of AU$1.85 billion, up 9.7% on the same period last year.

Optus saw its postpaid customers increase 1.3% to 5.85 million, prepaid drop 1.8% to just shy of three million, and data-only SIMs fell 4.5% to 992,000. The telco said it holds 31.2% of the mobile market, a drop of 0.2 percentage points. At the same time, monthly average revenue per customer (ARPU) increased by 12% to AU$40 for postpaid, 11% to AU$20 for prepaid, and 8% to AU$14 for data SIMs.

Average data usage per customer increased 17% to 12GB each month.

"Mobile service revenue grew strongly by 9.8%, reflecting the impact of the accretive Optus Choice plans which more than offset the impact of lower roaming and prepaid mobile revenues amid ongoing travel restrictions. ARPU rose on higher penetration of Optus Choice plans," the company said.

"Equipment sales revenue fell 4.4% on reduced volume due to global supply shortages and lower retail footfall. Excluding NBN migration revenue, operating revenue and EBITDA rose 1.3% and 28% respectively."

In the fixed line and home market, ARPU was steady at AU$70, as its NBN customers grew 9% to 1.1 million, 4G and 5G fixed wireless connections grew 0.5% to 211,000, and legacy HFC and DSL customers dropped 81% to 24,000. Overall, the Optus home customer base dropped 1.1% to 1.32 million.

Over the first half, payments from NBN dropped from AU$209 million to AU$51 million. Capital expenditure for Optus was AU$793 million for the half, with AU$534 million dedicated to mobile.

Although not broken out, Optus said its enterprise arm had EBITDA growth due to boosted sales and cost control measures.

Overall for its Singtel parent entity, the group recorded revenue increasing 3% to SG$7.65 billion, EBITDA up 1.3% to SG$1.93 billion, and net profit doubling to SG$954 million.

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