Singtel posts S$445m Q1 net profit, reversing year-ago loss

SINGTEL Z74 swung into the black with a net profit of S$445 million for the first quarter ended June 30, compared with a net loss of S$20 million a year ago on the back of improved operating and business environment with the easing of Covid-19 restrictions.

Underlying earnings for the group before interest, tax, depreciation and amortization (Ebitda) was also up 30.7 per cent to S$851 million, up from S$727 million a year ago.

This excludes Optus's national broadband network revenue, which fell to A$42 million (S$42 million) from A$108 million a year ago, as well as Jobs Support Scheme credits from the government, which also declined to S$3 million, down from S$69 million the year before.

The telco also posted a 7.5 per cent increase in operating revenue to S$3.8 billion, from S$3.5 billion a year ago.

Revenue growth was mainly driven by Singtel's Australian consumer business, where its operating revenue grew by 7.7 per cent to S$1.7 billion, from S$1.6 billion a year ago due to an 11 per cent appreciation of the Australian dollar. Assuming a constant exchange rate, operating revenue for the Australian consumer business fell 2.6 per cent.

Still, Ebitda for the business segment grew by 12 per cent on improved mobile postpaid average revenue per user, cessation of Covid-19-related customer fee waivers and rebates, as well as lower bad debts provision.

Singtel's operating revenue in Singapore also rose 1.3 per cent year on year to S$414 million, from S$409 million the year before on higher mobile service, fixed broadband and equipment sales, while also partially offset by lower voice revenue.

Meanwhile, Singtel's technology services arm NCS posted revenue growth of 5.7 per cent for the first quarter, including certain customer contracts that have been progressively transferred to Singtel.

In particular, revenue from its growth engines, such as digital, cloud and cybersecurity services, grew 31 per cent year on year, contributing to 45 per cent of total operating revenue, up from 36 per cent a year earlier.

In July, the company announced plans for NCS to recast the subsidiary as a pan-Asian business-to-business digital services provider to drive further growth in the enterprise and telco sectors in the region.

Singtel group chief executive officer Yuen Kuan Moon said that the company continues to see good demand from enterprise customers and that it is well-positioned to capitalise on the rising trend of digitalisation.

"While the resurgence of Covid-19 in many parts of Asia adds to an already challenging environment, we remain focused on investing in 5G and our digital capabilities which underpin our efforts to drive recovery and growth."

Shares of Singtel ended 0.9 per cent or S$0.02 lower at S$2.31 on Wednesday.

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