M1 profit up 6.6% in Q1 with more customers

Singapore

LOCAL telco M1 on Monday reported a 6.6 per cent hike in net profit to S$45.7 million in its first fiscal quarter for 2015, which ended on March 31st. This came on top of operating revenue of S$294.8 million, which was up 22.8 per cent over the S$240.2 million clocked in the year-ago quarter. Earnings per share (EPS) was up 5.6 per cent to 4.9 cents.

Service revenue rose 0.2 per cent year-on-year to S$204.4 million, with continued growth in mobile and fixed services revenues offsetting a decline in international call services revenue. Handset sales accounted for around S$90 million of operating revenue.

The service revenue was down from the S$211 million the telco clocked in the preceding quarter (fourth quarter, 2014). The shortfall was mainly on account of a drop in revenue from mobile services.

For the first quarter, non-voice revenue rose 6.9 percentage points year-on-year to 52 per cent of service revenue. Out of this, mobile data contributed 41.3 per cent and SMS 10.7 per cent. Mobile data contribution was up from 38.8 per cent in the preceding quarter and 32.7 per cent in the first quarter of 2014.

M1's EBITDA (earnings before interest, taxes, depreciation, and amortisation) margin was 40.8 per cent of service revenue.

The telco's mobile customer base increased 18,000 quarter-on-quarter in Q1, and its customer acquisition cost quarter-on-quarter went down 10.5 per cent to S$392. However, on a year-on-year comparison, customer acquisition cost was up 26.9 per cent from S$309 in Q1 of 2014.

During the quarter, M1 added 8,000 postpaid customers and 10,000 prepaid customers, bringing the total mobile customer base to 1.87 million as at March 31, 2015.

Average postpaid smartphone data usage increased to 3.2 GB (gigabytes) per month in the latest quarter, up from 2.8GB per month a year ago, while average prepaid data usage doubled year-on-year to 0.8GB per month. However, data plan Arpu (average revenue per user) was down 10.3 per cent to S$17.50 from first quarter 2014's S$19.50 and down 4.4 per cent from S$18.30 clocked in the fourth quarter of 2014.

As at January 2015, the telco had a 22.8 per cent mobile market share in Singapore. The telco has 68 per cent of postpaid customers on tiered data plans and 20 per cent of them exceeded their data bundle.

Monthly postpaid churn improved to 1 per cent, compared to 1.2 per cent during the preceding quarter. M1 also added 5,000 fibre broadband customers during the quarter to bring its base to 108,000.

In a statement, Karen Kooi, M1's CEO said: "Even as we see continued growth in data usage, we will make further investment in talent and new technology platforms to enable smart solutions on our network. This will position us well to capture further growth and participate in the smart nation initiative."

She added that based on current economic outlook and barring unforeseen circumstances, the company estimates moderate growth in net profit after tax for the year 2015.