Singtel Q1 profit falls 24.2% on 'intense' competition, travel restrictions

Singtel's group revenue fell 13.9 per cent to $3.54 billion from $4.11 billion a year ago.
Singtel's group revenue fell 13.9 per cent to $3.54 billion from $4.11 billion a year ago.ST PHOTO: LIM YAOHUI

SINGAPORE (THE BUSINESS TIMES) - Singapore Telecommunications (Singtel) posted declines in its group revenue and earnings before interest, tax, depreciation and amortisation (Ebitda) for the first quarter ended June 30, 2020.

Ebitda was down 24.2 per cent to $897 million from $1.18 billion a year ago, it said in a business update on Monday (Aug 17). Excluding National Broadband Network (NBN) migration revenues in Australia, Ebitda dropped 27 per cent to $797 million from $1.09 billion a year ago.

Meanwhile, group revenue fell 13.9 per cent to $3.54 billion from $4.11 billion a year ago. Excluding NBN migration revenues, group revenue dropped 14.4 per cent year on year to $3.44 billion, from $4.02 billion.

Roaming and prepaid mobile revenues and equipment sales were "severely impacted" by travel and movement restrictions and lower footfall in retail stores. The global economic slowdown also dampened both consumer and business spend.

Some of the group's information and communications technology projects were deferred or delayed, resulting in increased project costs and slower billings.

These factors, together with "intense" price competition across markets and declines in carriage revenues, led to the falls in Ebitda and group revenue.

Operating revenue in the group's Singapore consumer segment fell 21.6 per cent to $406 million with the government's circuit breaker measures in April and May. A sharp fall in roaming and lower prepaid usage led to a decrease in mobile service revenue. Ebitda fell 13.9 per cent after including $17 million of Jobs Support Scheme credits.

The group's Australia consumer segment's operating revenue fell 13.3 per cent to $1.6 billion. This came as mobile service revenue declined, due to lower roaming, late payment fee waivers and credits to frontline healthcare workers. Higher SIM-only customer mix and continuing price competition were also factors for the drop in mobile service revenue.

Singtel's enterprise business saw operating revenue dip 4.5 per cent to $1.38 billion due to continued declines in carriage services and weak business sentiment.

 
 

Operating revenue for the telco's group digital life segment nearly halved to $153 million from $301 million a year ago, after Amobee's revenue declined and the cessation of HOOQ's business.

Shares of Singtel closed at $2.44 on Friday, up $0.02 or 0.8 per cent.