Singtel recorded double-digit drops in profit and revenue for the first quarter of its fiscal year, with intense price competition in Singapore and Australia and challenging economic conditions caused by Covid-19 (coronavirus) restrictions slowing consumer and business spending.
Operating revenue in the quarter ending 30 June declined 13.9 per cent year-on-year to SGD3.54 billion ($2.58 billion), which the operator attributed to lower equipment sales and roaming revenue, delays in ICT projects and reduced customer spending.
The company didn’t release net profit figures. At the end of its last fiscal year ending 31 March, the operator announced it would move to half-yearly reporting and provide only quarterly highlights. EBITDA declined 24.2 per cent to SGD897 million, due in part to an exceptional charge of SGD364 million related to its interest in Bharti Airtel in India, which included additional provisions for adjusted gross revenue fees.
In a statement, Singtel group CEO Chua Sock Koong said: “We are seeing the effects of Covid-19 across our business as travel and movement restrictions impact roaming and prepaid revenues, reduce footfall in retail stores and delay enterprise projects.”
After-tax contributions from its regional associates rose 5.6 per cent to SGD267 million in the quarter. The company noted earnings declines at Telkomsel in Indonesia, AIS in Thailand and Globe Telecom in the Philippines, due to the impact of the pandemic, were mitigated by a lower net operating loss at Airtel following tariff increases.
Home market
Mobile service revenue in Singapore dropped 27.2 per cent to SGD404 million, as a result of a sharp fall in roaming and lower prepaid usage as customers relied on Wi-Fi as they stayed indoors and the number of tourists and overseas workers fell significantly. The restrictions also led to declines in equipment sales during the period, although the operator did not disclose figures.
Prepaid subscribers fell 4.4 per cent to 1.54 million, while post-paid subs grew 4.5 per cent to 4.26 million. Blended ARPU dropped 27.7 per cent to SGD23.
Average data usage rose 8.5 per cent to 5GB a month.
Australia performance
In Australia, mobile service revenue declined 4.1 per cent to AUD860 million ($618 million) due to lower roaming income, late payment fee waivers as well as a higher SIM-only customer mix and ongoing data price competition. Equipment sales also fell given lower retail traffic, the impact of lengthening handset replacement cycles and the end of subsidies.
Blended ARPU fell 4.9 per cent year-on-year to AUD28. Average monthly data usage increased 1.9 per cent to 10.1GB.
Its subscriber base was flat year-on-year, with prepaid users dropping 4.1 per cent to 3.23 million while post-paid subs increased 1.2 per cent to 5.8 million.
Operating revenue at its Digital Life unit declined 49 per cent due to lower revenue from Amobee and the closure of HOOQ’s business in March, Singtel said.
Amobee saw significant cut backs in ad spending by customers and a reduction in TV revenue as the technology licensing fee income recognised in the last corresponding quarter did not recur this quarter.
Comments