M1's Q4 earnings dip 2.1% to S$43.6m

Singapore

TELCO operator M1 on Monday announced a 2.1 per cent drop in fourth-quarter net profit to S$43.6 million, from S$44.5 million one year ago.

The earnings for the three months ended Dec 31, 2015 (Q4 FY2015) came on the back of an 11.1 per cent drop in operating revenue to S$307.9 million from S$346.4 million.

Earnings per share (EPS) for the period fell 2.7 per cent to 4.7 Singapore cents (Q4 FY2014: 4.8 Singapore cents). Ebitda (earnings before interest, taxes, depreciation and amortisation) was up 2.1 per cent at S$88.2 million, from S$86.4 million one year ago.

For full-year FY2015, M1's net profit rose 1.5 per cent to S$178.5 million, or 19.1 Singapore cents per share (FY2014: 18.9 Singapore cents). This was on the back of a 7.5 per cent hike in revenue to S$1.16 billion, from S$1.08 billion. Ebitda for the full year was up 1.9 per cent at S$341.8 million from S$335.5 million.

M1 proposed a final cash dividend of 8.3 Singapore cents, down from the 11.9-cent final dividend paid out a year earlier. Including the payment of a seven-cent interim dividend, the payout for FY2015 is 15.3 Singapore cents (FY2014: 18.9 Singapore cents).

Service revenue (group operating revenue minus handset sales) for the fourth quarter was S$209 million, marginally down from the S$211 million for the year-ago quarter. But handset sales dropped 26.9 per cent to S$99 million, from S$135 million.

However, full-year handset sales revenue was up 36.6 per cent at S$335 million, from the preceding year's S$245 million. Service revenue for the 12 months dipped 1.1 per cent to S$822 million due to lower international call services revenue.

Mobile data usage continued to grow, with revenue from mobile data for FY2015 increasing 10.7 percentage points to 46.3 per cent of service revenue.

FY2015 fixed services revenue grew 21.7 per cent to S$85.9 million, accounting for 10.4 per cent of service revenue. The growth was mainly driven by a larger residential customer base and new contracts secured in the corporate segment.

"The entry of OTT (over the top) content providers such as Netflix and Viu, offering a large library of on-demand content at low monthly subscription, will effectively unbundle content from access. This will further level the playing field," said M1 chief executive officer Karen Kooi.

As at end 2015, total customer base for M1 was 2.06 million. Postpaid customer base increased 46,000 year-on-year to 1.2 million, while prepaid customer base grew 30,000 to 733,000. During the year, the fibre customer base grew 25,000 to 128,000.

"Products and services are increasingly incorporating embedded sensors and connectivity. To capitalise on these opportunities, we will continue to develop our capability in data analytics with real-time feedback and leverage on our M2M (machine to machine) Connect platform to deliver smart solutions for our customers," added Ms Kooi.

Based on current economic outlook and barring unforeseen circumstances, M1 anticipates stable performance for 2016.

M1 shares closed at S$2.61 on Monday, up one cent.