Singtel Group reports lower revenues and profits in third quarter

Telegeography CommsUpdate: Singtel Group’s net profit for the fiscal third quarter ended 31 December 2019 declined 24% year-on-year to SGD627 million (USD451.5 million), due to ‘weakness in the enterprise business and the impact of the final settlement of a gain on the Airtel Africa pre-IPO investment and lower exceptional gains’.

Operating revenue for the three-month period was SGD4.38 billion, down 5% from SGD4.63 billion in the corresponding period a year ago, impacted by ‘lower equipment sales, weak business sentiment and spending, continued price erosion in carriage services and heightened market competition’.

Group EBITDA, meanwhile, was SGD1.16 billion – up 1% in constant currency terms – boosted by an increase in NBN migration revenue in Australia and cost management initiatives. Excluding exceptional items, however, underlying net profit declined 19% to SGD551 million from SGD680 million in October-December 2018.

More positively, Singtel reported a strong performance from its regional associates. ‘The regional associates’ pre-tax contributions for the quarter rose 15% driven by strong data growth across all markets. Airtel’s losses narrowed, on the back of strong 4G customer growth, customer upgrades and price increases in India. Its African operations also saw growth momentum in carriage and mobile money services.

The stronger operating performances mitigated higher costs and depreciation from its network expansion … Globe in the Philippines maintained strong growth momentum in mobile and broadband services. In Thailand, AIS’ revenue rose on device sales and subscriber gains but was offset by higher marketing expenses and depreciation and amortisation charges. In Indonesia, Telkomsel’s results were impacted by competition in the region outside Java,’ the press release noted. Further, the Group pointed out that in Australia, Optus has rolled out over 400 5G fixed-wireless sites, while in its home market, Singtel will submit its 5G proposal to the government later this month.

Commenting on the Group’s latest results, Ms Chua Sock Koong, Singtel Group CEO, said: ‘It’s been a challenging quarter. Weak macroeconomic conditions have weighed on our enterprise business and Optus saw eroding margins in its fixed retail business with the higher mix of NBN customers. However, we continue to execute to our longer term growth strategy. NCS and Trustwave saw higher order books and our data centre services also saw positive growth.’

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