Singtel reports stagnant SG$1.2b quarterly earnings

Singtel has revealed an EBITDA of SG$1.22 billion and a net profit of SG$973 million on revenue of SG$4.41 billion as its consumer business fell but enterprise and digital life segments rose.

Singapore's largest telecommunications provider, Singtel, has announced its financial results for the quarter ending December 31, 2016, reporting a net profit of SG$973 million -- up SG$19 million from the SG$954 million reported for same quarter in 2016, but stable in constant currency terms.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) were stable, at SG$1.22 billion, although in constant currency terms, this was down by 2 percent. Operating revenue decreased by 1.5 percent year on year, or 4 percent in terms of constant currency, to SG$4.41 billion.

Total assets stood at a value of SG$47.7 billion, up from SG$43.9 billion, as of the end of calendar 2016.

Singtel CEO Chua Sock Koong called the results "resilient".

"We have managed to hold good ground against the backdrop of a slowing Singapore economy and more challenging business environment all around," she said.

"Our ICT business, particularly cybersecurity, has held us in good stead. This quarter, we focused on building out our global network of security operation centres while increasing resources in sales and delivery to meet the growing demand for cybersecurity services.

"Our consumer business also did well, due primarily to ongoing cost management, the sublicense of Premier League content rights in Singapore, and significant growth in branded post-paid mobile customers migrating to higher-tier plans in Australia."

Singapore's group business operates through brands in Singapore, Australia, the United States, India, Indonesia, the Philippines, and Thailand.

A breakdown of revenue saw Singtel's group consumer business make SG$2.58 billion, down 3.7 percent; group enterprise make SG$1.69 billion, up 0.5 percent; and its group "digital life" business make SG$146 million, up 21.6 percent.

Group operating revenue by products and services saw mobile make SG$1.5 billion, down 14.2 percent due mainly to the Australian regulator's decision in August 2015 to reduce the rate that mobile network operators can charge each other for calls and SMS; data and internet made SG$831 million, up 4.5 percent due to higher NBN revenue in Australia and demand for international and domestic circuits and bandwidth in Singapore.

IT contributed SG$758 million, up 5.2 percent due to growth in cybersecurity as well as the provision of Singaporean government infrastructure services; sale of equipment made SG$653 million, up 20.8 percent thanks to higher smartphone sales; managed services made SG$582 million, up 5.4 percent; national telephone gained SG$263 million, down 5.3 percent; digital businesses had revenue of SG$154 million, up 22.6 percent; business solutions made SG$177 million, up 4.7 percent; international telephone made SG$116 million, down 12.5 percent; and pay TV made SG$75 million, up 7.2 percent.

Singtel's Singaporean mobile business was down by SG$10 million year on year to SG$526 million in revenue, gaining 30,000 customers to 2.35 million across post-paid but losing 40,000 customers on prepaid, down to 1.74 million. Post-paid average revenue per user (ARPU) also dropped down to SG$69 due to customers spending less on roaming and voice.

Its regional mobile segment rose by SG$13 million, however, to make SG$661 million in revenue: SG$360 million from Telkomsel, a rise of 31 percent; SG$142 million from Airtel, down by 27 percent due to spectrum financing; SG$89 million from AIS, down by 28 percent due to higher network costs and spectrum payments; and SG$66 million from Globe, down by 18 percent.

"While there are concerns of a global economic slowdown, the growth story in the developing markets where we are invested remains compelling as mobile data usage continued to grow across all our mobile associates," Chua said.

"While Airtel India focused on defending scale and market position and AIS incurred higher network costs and charges to maintain its network leadership in Thailand, strong results from our associates in the other regions helped overall contributions to grow. The group's customer base grew another 2 percent in the quarter to 640 million customers across the region."

Singtel's Singapore consumer segment saw mobile communications fall slightly, from SG$330 million to SG$328 million in revenue; fixed-line rise from SG$133 million to SG$142 million; international telephone drop from SG$65 million to SG$52 million; and equipment sales rise by 26 percent, from SG$107 million to SG$134 million.

Its Singaporean fixed-line business saw Singtel TV contribute SG$63 million in revenue up from SG$57 million thanks to a rise in ARPU to SG$41, which offset its loss of 15,000 customers during the year to a total of 409,000. Its fibre broadband customers numbered 546,000, up by 61,000 from a year previous.

Singtel also announced that it has extended its cybersecurity services to Japan, setting up a new security operations centre (SOC) in Tokyo for a total of nine SOCs worldwide.

Since the end of the financial reporting period, Singtel has also upgraded its 4G network to enable users to attain speeds of up to 450Mbps with compatible smartphones; achieved speeds of 1Gbps in a trial of its 4G network with Ericsson; and enabled eSIMs across its network.

Singtel-owned Australian telecommunications provider Optus reported a quarterly net profit of AU$188 million and EBITDA of AU$650 million on revenue of AU$2.43 billion.