Singtel's yearly profits plummet 65.3% on Bharti hit and Aussie competition

28 May 2020

Singapore Telecommunications (Singtel Group) said that full-year net profit for the year ended 31 March 2020 plummeted 65.3% to SGD1.075 billion (USD757.8 million), as it weathered the storm of intense competition in Australia and took a SGD1.80 billion hit relating to its stake in Indian carrier Bharti Airtel. Here, Singtel said it had to make provisions in its full-year results in relation to the Indian telco making payouts for spectrum charges and licence fees.

Southeast Asia’s largest telco by subscribers and revenue saw full-year operating revenue slide 4.8% year-on-year to SGD16.542 billion from SGD17.373 billion as pre-tax income (EBIT) fell 7.5% to SGD3.704 billion and EBITDA declined by 3.2% to SGD4.541 billion; EBITDA margin was 27.5% compared to 27.0% in the year to end-March 2019. Further, underlying net profit, which excludes exceptional items, fell 13.0% to SGD2.457 billion, as the group reported that its poor performance in the January-March quarter was made worse by ‘continuing data price competition and soft consumer sentiment in Australia’, along with ‘lower equipment sales and margins’. Additionally, it noted that its operational performance in its fiscal fourth quarter was adversely impacted by the onset of the COVID-19 pandemic from February and a 6% depreciation of the Australian dollar (AUD).

Singtel Group reported that its combined (aggregate) mobile customer base reached 705 million as at 31 March 2020, down from 715 million at end-December 2019, but higher than the figure of 692 million reported at 31 March 2019, providing a ‘strong platform to drive usage of mobile data services and expand into digital services, including content, mobile financial and gaming services’. Full-year CAPEX, meanwhile, increased sharply to SGD2.037 billion from SGD1.718 billion.

The Singapore-based regional carrier almost halved its final dividend to SGD0.05.45 per share, saying it wanted ‘to preserve financial headroom to cope with uncertainties in the current COVID-19 operating environment and the capacity to invest in 5G’. It did not provide guidance for the financial year ending 31 March 2021 due to ‘heightened uncertainty’ surrounding the pandemic.

Singapore, Bharti Airtel, Optus, Singtel Group