Q4 net profit dips by 2.5% at M1 as drop in handset sales eats into operating revenue

NET profit has dipped by 2.5 per cent on the previous year at M1, the telco said on Tuesday.

Fourth-quarter earnings, for the three months to Dec 31, 2017, stood at S$31 million, down from S$31.8 million in the same period the year before.

The results came in on a 2.1 per cent decline in operating revenue to S$307.2 million.

The slide was no thanks to how a rise in service revenue was offset by a drop in handset sales.

A dividend of 6.2 Singapore cents a share was recommended by the board - compared with the final dividend of 5.9 Singapore cents a year prior - and is set to be paid out on Apr 27.

That brings the full year's payout to 11.4 Singapore cents a share.

For the full year, M1 saw net profit fall by 11.5 per cent to S$132.5 million, because of increased depreciation and amortisation expenses and a higher interest expense.

The decrease came in spite of a 1 per cent uptick in operating revenue, which was S$1.071 billion in 2017 - a rise that came from an increase in fixed services revenue.

The company said in its financial results announcement: "It is expected that competition will increase in 2018 with the anticipated entry of new mobile service providers. We remain committed to improving our services and deliver superior customer experience to attract and retain customers."

As it transforms into a "smart communications provider", the company said it is progressively scaling up its infocomm technology capabilities and digital services portfolio.

This, chief executive Karen Kooi said, is to take advantage of the rise in the Internet of Things and Singapore's Smart Nation drive, which "will improve operational efficiency and enhance our customer touchpoints".

M1 closed up by S$0.01, or 0.54 per cent, to S$1.87, before results were announced.