Singtel Q1 profit drops 5.6% on lower contributions from associates, exceptional charges

Geronimo Vena
Agosto 12, 2017

For the quarter ending June 30, Singtel reported total net profit of SG$892 million, down 5.6 percent year on year from SG$944 million, on earnings before interest, tax, depreciation, and amortisation (EBITDA) of SG$1.27 billion, up 2.7 percent from SG$1.24 billion. Revenue rose to S$4.23 billion from S$3.91 billion, SingTel, the biggest telecommunications company in Southeast Asia, said in a regulatory filing. Free cash flow was SGD 1.2 billion. Mass market fixed revenues were up 13 percent, mainly on higher NBN revenues driven by customer growth and migration payments. Among the regional associates, Telkomsel increased its pre-tax profit contribution by 18 per cent due to robust growth in data and digital services. Equipment sales rose on strong demand for new smartphones and more consumers re-contracting at higher tier plans to access higher tier data allowances. "We do expect growth of mobile data to continue". On the home front, revenue increased due to growth in subscriptions of higher-tier fibre broadband plans and add-on services as well as the sub-license of Premier League content rights.

According to Singtel, its net profit would have been up by 3.4 percent if not for Indian telco Airtel - earlier this year named the fastest telco in India by OpenSignal - which dropped by 41.6 percent in its pre-tax contributions.

Business solutions operating revenue was SG$126 million, down 16.2 percent; national telephone SG$251 million, down 6.1 percent; and worldwide telephone SG$112 million, down 12.5 percent. ICT services now contribute 44 percent of Group Enterprise revenue.

Blame the lower associates' contributions and Optus' exceptional charges.

Group Digital Life's revenue jumped 91 percent, boosted by Amobee's performance in social and media advertising, and first-time revenue contribution from Turn, a global technology platform for marketers and agencies, which was acquired by Amobee in April this year. Amobee achieved EBITDA breakeven this quarter. Overall EBITDA improved despite higher content investments at HOOQ, Singtel said.

"With the integration of Turn, Amobee is realising synergies and winning new companies such as KIA, Spotify, and Constellation Brands as clients".

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