Sing­tel Q2 earn­ings fall 77% to $667m

The New Paper - - NEWS -

Lo­cal telco re­ports worst quar­ter in 15 years

A triple whammy of for­eign cur­rency move­ments, lower con­tri­bu­tions from as­so­ciate firms and a halt in Aus­tralia’s broad­band roll-out gave Sing­tel its worst quar­ter in 15 years.

Earn­ings for the three months to Sept 30 plunged 77 per cent to $667 mil­lion from the same pe­riod last year, the group re­ported yes­ter­day.

Sing­tel also chalked up a $48 mil­lion ex­cep­tional loss in the sec­ond quar­ter, mainly on staff re­struc­tur­ing costs.

This com­pares with a one-off gain of $1.94 bil­lion last year from the sale of units in NetLink Trust. Strip out the ex­cep­tional items, and un­der­ly­ing net profit fell 22 per cent to $715 mil­lion.

Rev­enue was flat at $4.27 bil­lion but would have grown by 3.9 per cent in con­stant cur­rency terms, said Sing­tel, which took hits across the board.

The dig­i­tal life seg­ment lost $34 mil­lion be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion, up from $14 mil­lion pre­vi­ously.

Sing­tel has low­ered its guid­ance for dig­i­tal mar­ket­ing unit Amobee to sin­gle-digit growth, down from the mid-teens pro­jected in May.

Mr Samba Natara­jan, chief ex­ec­u­tive of group dig­i­tal life, told a brief­ing yes­ter­day: “Our pro­gram­matic busi­ness ... is go­ing quite well ...but the man­aged me­dia busi­ness ... is be­gin­ning to de­cline.”

The Sin­ga­pore con­sumer seg­ment re­duced churn for the quar­ter and lifted op­er­at­ing rev­enue by 4.8 per cent to $555 mil­lion, led by a strong in­crease in equip­ment sales on premium hand­set launches.

Earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion de­clined 7.4 per cent to $180 mil­lion, with lower con­tri­bu­tions from higher-mar­gin legacy car­riage ser­vices and ab­sence of Sing­tel TV sub-li­cence rev­enue for the Pre­mier League. The unit is also brac­ing it­self for the en­try of Aus­tralia’s TPG Tele­com.

Mr Yuen Kuan Moon, group chief dig­i­tal of­fi­cer and chief ex­ec­u­tive for the Sin­ga­pore con­sumer busi­ness, said: “We hold our po­si­tion that (hav­ing) three op­er­a­tors is suf­fi­cient for Sin­ga­pore ... but we have to face a fourth op­er­a­tor.

“Our fo­cus will al­ways be on the cus­tomers and it con­tin­ues to be even more im­por­tant in the face of the com­pe­ti­tion.”

The board ap­proved an in­terim div­i­dend of 6.8 cents a share for the half-year to Sept 30, un­changed from a year ear­lier.

Sing­tel shares closed down 1.91 per cent to $3.08 af­ter the an­nounce­ment.



Sing­tel shares closed 1.91% down to $3.08 af­ter the an­nounce­ment.

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