M1's Q1 net income down 15%

18 Apr 2017

Singapore’s M1 has reported a 14.6% year-on-year fall in net income for January-March 2017 to SGD36.3 million (USD26 million), in part the result of higher depreciation and interest expenses, but noted that when compared to the preceding quarter, net profits were up 14.3%. The operator said first-quarter operating revenue increased 1.2% y-o-y to SGD260.7 million while service revenue remained stable at SGD201.5 million, as growth in fixed services revenue offset lower IDD and roaming revenues. Sales derived from fixed services increased 22.8% on an annualised basis to SGD30.0 million and accounted for 14.9% of overall service revenue, driven by increased residential and corporate signups; M1 ended the quarter with an 8,000 quarter-on-quarter increase in fibre broadband customers to 168,000. Moreover, M1 also added a net 24,000 post-paid mobile customers and 3,000 pre-paid customers to lift its overall mobile total to 2.05 million at 31 March 2017.

Singapore’s smallest telecoms operator by subscribers and revenue has struggled of late. For the year ending 31 December 2016, M1’s net income slumped 16.1% amid turbulent changes in the local market and the impending arrival of a fourth telco. The company booked annual net profit of SGD149.7 million, down from SGD178.5 million in 2015, impacted by lower international voice and roaming revenues, weakening demand for retail traffic and lower handset sales. Revenue slipped 8.3% y-o-y to SGD1.06 billion, as the firm reflected on what it has termed a challenging time for the industry – a situation it expects to continue for at least the next few quarters. In her FY 2016 conference call, M1 CEO Ms Karen Kooi said: ‘It has been a challenging year in 2016, with increased competitive activity. Our traditional telco revenue continued to be impacted by over-the-top services but we are growing in mobile data and strongly in fixed services’. Indeed, the turbulence in the local market has prompted M1’s main shareholders Singapore Press Holdings (SPH), Keppel Telecommunications and Transportation and Axiata Group, which between them collectively control a roughly 60% stake, to consider options to sell their respective stakes, although each has declined to give a reason for the move. In what is being seen as the first major M&A activity in the city-state in years, against the backdrop of the imminent arrival of competition from a fourth player in the shape of Aussie-backed TPG Telecom, the shareholders issued separate statements last month confirming they are undertaking a strategic review of their respective shareholdings in M1.

Singapore, M1