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SingTel saw Q4 profit drop by 14%

SingTel reported almost flat revenues and 14% decline in net profit in the quarter ending 31 December 2018, blaming negative influence from its investments in Australia and India.

Wei Shi

February 14, 2019

2 Min Read
graph chart down decline fall

SingTel reported almost flat revenues and 14% decline in net profit in the quarter ending 31 December 2018, blaming negative influence from its investments in Australia and India.

In its quarterly results announcement, SingTel reported a 1% year-on-year growth in revenues to S$ 4.626 billion (1 Singapore $ = 0.74 US$), or 4% in constant currency, but 11% decline in EBITDA, and 14% decline in net profit. The first nine months of FY2019 saw revenues almost unchanged (up by 0.2%) of the same period the previous year, EBITDA down by 8%, and net profit down by 51%. The total free cash flow is still solid at S$2.5 billion although it went down by 10% from a year ago.

“We have stayed the course despite heightened competition and challenging market and economic conditions. We’ve continued to add postpaid mobile customers across our core business in both Singapore and Australia while making positive strides in the ICT and digital space,” said Chua Sock Koong, Singtel Group CEO. “We remain focused on investing in networks and building our digital capabilities – areas that are important to our customers and our future success. We will also step up on managing costs, growing revenues and driving efficiencies through increased digitalisation efforts.”

The key factor that impacted the results was the return on its investment in regional associates. The total profit before tax (PBT) in its regional associate portfolio went down by 35% to S$342 million. The worst hit was Airtel, which suffered a S$167 million decline in PBT and registered a pre-tax loss of S$129 million. When broken down to different markets, Airtel fared better in Africa but came under “continued pricing pressures” (from Jio)

In Australia, SingTel’s subsidiary Optus has delivered a healthy growth of 16% in total revenues  to A$1.64 billion (1 Australian $ = 0.71 US$). The mobile operator also switched on Australis’s first commercial 5G network in January. The slower than expected migration to NBN by broadband users, however, has brought in a 9% decline in mass market fixed revenue.

Despite lowering its outlook for the full financial year (ending 31 March) from stable EBITDA to single digital decline, SingTel was still confident in its long-term prospective. “Our long-term view on our regional associates remains positive as they continue to ride the growth in data and execute well against the challenges and competition,” added Chua, the CEO. “We expect the regional markets to revert to more sustainable market structures and deliver long-term profitable growth. Meanwhile, we are working closely with them to build a regional ecosystem of digital services that leverages the Group’s strengths and unlocks the value of our joint mobile customer base of over 675 million.”

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About the Author(s)

Wei Shi

Wei leads the Telecoms.com Intelligence function. His responsibilities include managing and producing premium content for Telecoms.com Intelligence, undertaking special projects, and supporting internal and external partners. Wei’s research and writing have followed the heartbeat of the telecoms industry. His recent long form publications cover topics ranging from 5G and beyond, edge computing, and digital transformation, to artificial intelligence, telco cloud, and 5G devices. Wei also regularly contributes to the Telecoms.com news site and other group titles when he puts on his technology journalist hat. Wei has two decades’ experience in the telecoms ecosystem in Asia and Europe, both on the corporate side and on the professional service side. His former employers include Nokia and Strategy Analytics. Wei is a graduate of The London School of Economics. He speaks English, French, and Chinese, and has a working knowledge of Finnish and German. He is based in Telecom.com’s London office.

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