Singtel quarterly net profit soars on NetLink Trust sale gains

9 Nov 2017

Southeast Asia’s biggest telco Singtel Group today reported its financial results for the fiscal second quarter ending 30 September 2017, highlighting record net profit of SGD2.889 billion (USD2.12 billion), up 197% compared to SGD972 million in the same period a year ago, significantly boosted by gains from its divestment of a 75.2% stake in NetLink Trust in July this year. NetLink Trust is the firm tasked with building, managing and operating the city-state’s fibre network infrastructure – the foundation of Singapore’s Next Generation Nationwide Broadband Network; Singtel announced plans for its initial public offering (IPO) in June in what was the largest new listing in Singapore in more than four years.

Operating revenue at Singtel grew 6.9% year-on-year to SGD4.370 billion from SGD4.086 billion, the company said in a statement, while EBITDA climbed 4.8% to SGD1.292 billion with an EBITDA margin of 29.6% (down from 30.2%) and operating profit (EBIT) dipped 4.1% to SGD1.352 billion. Underlying net profit for the quarter also declined, by 4.1%, impacted it said by its Indian associate Bharti Airtel, which continues to face intense competition in its local market. Besides Bharti Airtel, Singtel also has stakes in Indonesia’s Telkomsel, Philippines’ Globe Telecom and Thailand’s Advanced Info Service (AIS).

Expanding on the contribution made by Singtel’s regional associates, the firm’s statement read: ‘The regional associates continued to drive customer growth and higher data consumption. However, intense competition in India, coupled with higher depreciation and amortisation, led to a 7% decline in pre-tax operating profit contributions. Airtel’s lower earnings in India were partially offset by improved operational performance in Africa. Last month, Airtel announced a merger with Tata Teleservices’ consumer business in a move that will bolster its market leadership and spectrum holdings. Telkomsel strengthened its network leadership with the acquisition of additional 4G spectrum in the recent auction. Profit contributions from AIS rose 16%, led by strong performances in post-paid mobile and fibre broadband services, and positive currency impact. Globe also delivered a strong performance on the back of demand for mobile data related services. However, earnings were affected by the depreciation of the peso.’

The Singtel Group had an aggregated user base of 669.864 million mobile subscribers at 30 September 2017, compared to 629.356 million a year earlier. Of the total, 4.098 million were in its home market and 9.827 million registered at Aussie venture Optus. Meanwhile, the Group’s under-pressure Indian associate Bharti Airtel contributed a further 366.060 million (including 282.047 million in India), while Telkomsel, AIS and Globe contributed 190.362, 40.186 and 59.331 million users, respectively. On a proportionate basis, meanwhile, Singtel had 254.767 million mobile customers at end-September, up 13% y-o-y.