Singapore operator Singtel saw its revenue increase by 2 percent year-on-year to SGD 4.34 billion in the fiscal fourth quarter ended 31 March. Revenue growth was mainly boosted by its consumer business and growing digital businesses. Pre-tax profits for the regional associates declined 20 percent to SGD 389 million due to Airtel’s results, which were affected by competitive pressures, and the associates’ higher depreciation, spectrum amortisation and network costs from the expansion of their 4G networks. Net profit, which included exceptional gains from Airtel, was stable at SGD 773 million.
In constant currency terms, operating revenue for the full year was up 4 percent to SGD 17.37 billion, driven by growth in ICT, digital services and higher equipment sales from mobile connections across Singapore and Australia. However, net profit fell 44 percent to SGD 3.10 billion, mainly due to an exceptional gain last year from the divestment of 75 percent of NetLink Trust (NLT), and underlying net profit declined 21 percent on losses from Airtel and lower contributions from Telkomsel.
SingTel’s Indonesian unit Telkomsel returned to revenue growth, reversing declines during the SIM card registration exercise. In India, Airtel’s results were affected by intense price competition. Airtel is currently in the process of raising up to USD 4.5 billion, including USD 3.5 billion through a rights issue. In Thailand, AIS’ earnings were impacted by higher network depreciation and spectrum amortisation. In the Philippines, Globe delivered solid quarterly revenue and earnings growth from both mobile and broadband services, parent company SingTel reported.
The SingTel Group ended March with 650 million customers across the region. Free cash flow for the year was up 1 percent to SGD 3.65 billion.
In Australia, revenue and EBITDA increased by 10 percent for the quarter led mainly by higher NBN migration payments. Mobile service revenue was stable amid data price competition. Postpaid handset customers increased 121,000 while prepaid customers declined by 109,000, due to a clean-up of inactive subscribers by a wholesale customer. Mass market fixed revenue grew 19 percent with higher NBN migration payments.
In Singapore, revenue increased 1 percent, while EBITDA rose 5 percent on cost management. Mobile revenue grew 4 percent as strong equipment sales offset the impact of lower prepaid voice usage and revenue. The operator added 32,000 postpaid customers in the quarter. Fixed services fell due to lower voice usage, but this was mitigated by the growth in broadband services.
The Group Enterprise unit saw its revenue fall 3 percent for the quarter, as a result of lower carriage revenue. ICT services rose 4 percent, while cyber security revenue was up 11 percent, driven by growth in Asia Pacific. ICT now contributes 51 percent of Group Enterprise revenue, up from 48 percent in the same quarter last year. EBITDA was down 16 percent.
Group Digital Life’s revenue rose 33 percent for the quarter from digital marketing arm Amobee’s programmatic advertising business, and contributions from Videology, which was acquired in August 2018. Excluding Videology, Group Digital Life’s revenue increased 17 percent.
SingTel’s board of directors has recommended a final ordinary dividend per share of 10.7 cents, which brings the total ordinary dividend per share for the year to 17.5 cents and represents a payout of SGD 2.86 billion.
For FY2020, SingTel Group expects its consolidated revenue to grow by mid single digits and consolidated EBITDA to be stable. Capital expenditure is expected to reach SGD 2.2 billion, comprising AUD 1.4 billion for Optus and SGD 0.8 billion for the rest of the Group. Free cash flow, excluding spectrum payments and dividends from associates, is expected to reach SGD 2.1 billion. Dividends from the regional associates are expected to amount to SGD 1.2 billion, reflecting Telkomsel’s lower earnings for its financial year ended 31 December 2018.
Singtel expects to maintain its ordinary dividends at 17.5 cents per share for the financial year ending 31 March 2020.
