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M1's Q4 profit down 21.4%

Higher expenses devoured M1's earnings for the fourth quarter, according to results out on Monday.


HIGHER expenses devoured M1's earnings for the fourth quarter, according to results out on Monday.

The telco's net profit for the three months to Dec 31, 2018, fell by 21.4 per cent to S$25.2 million as it spent more on wooing customers and fixing its infrastructure. Headcount was also up, thanks to an expansion of the corporate segment.

Headline revenue grew by 3.7 per cent to S$312.8 million - helped by a 13.3 per cent surge in handset and equipment sales, especially with the consolidation of a new subsidiary. M1 completed its purchase of information technology provider AsiaPac Distribution in November last year.

But service revenue - that is, turnover from mobile telecommunications services, international call services and fixed services - dipped by 1.8 per cent to S$125 million.

Contributions from mobile services were down by 2.7 per cent to S$139.6 million, as the number of customers fell to 1.96 million on a flight in the pre-paid mobile segment.

M1 includes the customers and contributions from mobile virtual network operator Circles.Life, which has leased its network since May 2016.

Still, fibre broadband subscribers grew by 10.7 per cent year on year to 209,000. The rise, alongside higher turnover from corporate projects, pushed fixed service revenue up by 8.6 per cent to S$36.7 million.

Meanwhile, average revenues per user (ARPUs) fell across the board in the quarter. For instance, gross post-paid ARPU was down by 4.3 per cent at S$54, while gross broadband ARPU lost 2.1 per cent to S$$42.80.

The group's net profit for the 12 months came in 6 per cent lower at S$130.7 million, on a 4 per cent increase in revenue, to S$1.09 billion.

M1's board has recommended a final dividend of six Singapore cents a share, for a full-year payout of 11.2 Singapore cents - a shade below the 11.4 Singapore cents in 2017.

It noted that the group's performance was in line with its half-year prospect statement, but did not give a detailed outlook statement.

M1 is going through a general offer by a joint venture between shareholders Keppel Corp and Singapore Press Holdings, which publishes The Business Times. The counter closed unchanged on Monday at S$2.06, which has been set as the final offer price, before the results release.