Singtel shrinks net profit by SG$16m

Singtel has reported a net profit of SG$954 million, down SG$16 million from the year prior, on revenues of SG$4.47 billion for the quarter ending December 31.

Singapore's largest telecommunications provider, Singtel, has announced its financial results for the quarter ending December 31, 2015, reporting a net profit of SG$954 million -- down SG$16 million from the SG$970 million reported for same quarter in 2014.

The telco remained relatively stable overall, recording a 1.7 percent year-on-year drop in net profit, a 1.1 percent rise in operating revenue, and a 1.8 percent increase in operating expenses.

Singtel's net profit for the nine months to December was up by a marginally higher 2.9 percent, however, from the SG$2.84 billion recorded in 2014 to SG$2.93 billion.

Operating revenue, meanwhile, stood at SG$4.47 billion for the quarter, up 1.1 percent from the SG$4.43 billion reported a year previous. Operating revenue for the nine months to December was SG$12.87 billion, down 0.1 percent from the SG$12.88 billion a year earlier.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) was SG$1.22 billion for the quarter, down 0.7 percent year on year from SG$1.23 billion. For the nine-month period, EBITDA was SG$3.75 billion, down 1.7 percent from the SG$3.82 billion a year earlier.

Singtel welcomed the results, saying the telco had seen overall success thanks to offering high data packages and bundling entertainment offerings in.

"Innovations and investments in our core consumer and enterprise businesses continued to deliver," said Chua Sock Koong, Singtel Group CEO.

"We focused on giving customers the best mobile data and entertainment experience by offering a mix of flexible data plans and differentiated content. This has seen more mobile customers in Singapore and Australia trade up to higher-tier plans."

Operating expenses amounted to SG$3.29 billion for the quarter, up 1.8 percent from SG$3.23 billion; operating expenses for the nine months to December were SG$9.23 billion, a 0.7 percent increase from SG$9.17 billion a year previous.

Singtel's net assets amounted to SG$24.54 billion as of the end of December, a rise of SG$845 million, or 3.6 percent, from the SG$23.7 billion reported a year earlier.

Cash and cash equivalents for the quarter was SG$685.9 million, a rise of 9 percent from the SG$629.3 million for the 2014 December quarter.

Operating revenue when broken down by segment saw mobile communications contribute the most, at SG$1.75 billion; data and internet, at SG$795 million; ICT, at SG$646 million; sale of equipment, at SG$540 million; national telephone, at SG$278 million; international telephone, at SG$132 million; digital businesses, at SG$125 million; pay TV, at SG$70 million; and Trustwave -- which it acquired for $810 million in April last year -- at SG$75 million.

Revenue for Singtel's group consumer business was down by 3.3 percent, from SG$2.77 billion to SG$2.68 billion, while EBITDA was down 1.3 percent, from SG$796 million to SG$785 million.

Its consumer average revenue per user (ARPU) for the Singapore market grew by 1 percent, to SG$61, while its post-paid mobile ARPU was down by 3 percent, to SG$73, due to roaming and dilution of data-only SIM and mobile share plans.

Mobile communications revenue for the Singapore market was up 1 percent year on year, from SG$533 million to SG$536 million.

Its 4G mobile customer base in Singapore grew by 122,000 quarter on quarter, to 2.21 million customers, although prepaid customers fell by 17,000 quarter on quarter to 1.78 million due to higher numbers of tourist SIMs with shorter validity periods. Singtel has the widest 4G coverage in Singapore, at 99.8 percent.

In its home market of Singapore, fixed-line revenue remained the same, at SG$133 million; revenue from the sale of equipment fell from SG$122 million to SG$107 million; and international revenue fell from SG$76 million to SG$65 million.

Consumer home customers rose from 492,000 to 498,000, while revenue remained the same, at SG$131 million.

Singtel's group enterprise business operating revenue grew from SG$1.56 billion to SG$1.68 billion, up 7.6 percent year on year, fuelled by growing cybersecurity services and the first full-quarter contributions from Trustwave. EBITDA fell by 0.3 percent, from SG$491 million down to SG$489 million.

"We are investing significantly in our engineering talent, and strengthening our core capabilities in cybersecurity, data analytics, and cloud computing," Chua Sock Koong said.

"This is helping the enterprise business stay relevant and resilient in the face of both technology disruption and softer business sentiment."

Revenue for its group digital life business was up by 22.8 percent, from SG$98 million to SG$120 million, while EBITDA was negative SG$33 million, an 18.1 percent improvement over the negative SG$40 million a year earlier.

Singtel TV revenue was SG$51 million, up 3.4 percent from the SG$55 million in December 2014. Residential TV customers numbered 424,000, up from 420,000 over the year. ARPU remained stable, at SG$39.

Singtel fibre broadband customers numbered 485,000 by December 31, up by 95,000 year on year, giving Singtel a fibre broadband market share of 52 percent -- down from 55 percent a year previous.

Singtel's Australian subsidiary Optus also announced its results for the December quarter, reporting a net profit of AU$227 million on revenues of AU$2.43 billion, due to growth in mobile and NBN payments.