Singtel’s quarterly profits weaken on lower contributions from regional associates

9 Feb 2018

Singapore Telecommunications (Singtel) reported an 8.5% year-on-year drop in net income for its fiscal third quarter ended 31 December 2017, attributed in the main to falling voice revenues, higher expenses and a lower contribution from some regional associates, namely Airtel (India), Telkomsel (Indonesia) and Globe Telecom (Philippines), as well as a lower contribution from NetLink NBN Trust following Singtel’s reduction of its economic interest in the venture. Net profit for the three-month period declined to SGD890 million (USD669.7 million) from SGD973 million in the year-ago quarter, as underlying net profits (i.e. excludes exceptional items) fell by 5.2% to SGD2.737 billion and regional associates’ pre-tax earnings dropped 9.4% to SGD1.816 billion. The group said that while its regional associates continued to post strong customer growth and higher data consumption, Airtel’s results were adversely impacted by the cut in domestic mobile termination rates and intense competition, and Telkomsel’s earnings fell as a result of heightened competition in data and declines in traditional voice services. Profit contribution from Thai enterprise AIS rose, underpinned by revenue growth and strong cost management, but in the Philippines, Globe’s earnings were affected by higher depreciation and finance costs on network investments. More positively, consolidated operating revenues rose by 4.4% y-o-y to SGD4.603 billion from SGD4.410 billion and EBITDA increased by 6.0% to SGD1.293 billion.

The Singtel Group’s aggregate mobile base reached 687.518 million at 31 December 2017, compared to 639.557 million twelve months earlier. Its proportionate share, meanwhile, was 269.556 million mobile users, up from 244.154 million. In its home market, Singtel had a total of 4.109 million mobile users (end-2016: 4.088 million), while Australian unit Optus reported 9.952 million (9.573 million), Telkomsel had 196.322 million (173.919 million), AIS 40.056 million (41.031 million), Globe 60.686 million (62.799 million), and Bharti Airtel counted 376.393 million, up from 348.147 million – of which 290.112 million were in India (265.853 million), 84.130 million in Africa (80.356 million) and 2.150 million in South Asia (1.938 million).