Singtel Q4 profit inches up 0.4% to S$773m, full-year profit tumbles 43%

SINGTEL on Wednesday reported a 0.4 per cent rise in net profit to S$773 million for the fourth quarter to March 31, from S$769.6 million a year ago.

Earnings per share (EPS) for the quarter was 4.74 Singapore cents, from 4.72 cents a year ago.

Singtel's board is recommending a final dividend of 10.7 cents per share, bringing the total ordinary dividend per share for the year to 17.5 cents. If approved by shareholders, the dividend will be paid on Aug 15, 2019.

Singtel expects to maintain its fiscal 2020 ordinary dividend at 17.5 Singapore cents per share, barring unforeseen circumstances.

Shares of the telecommunications company closed S$3.15 on Tuesday, up one Singapore cent.

Revenue for the quarter was at S$4.34 billion, up 1.9 per cent from S$4.26 billion a year ago, on the back of growth from its consumer and digital businesses.

The group saw pre-tax profits for regional associates fall 20 per cent to S$389 million from Airtel's results, which was impacted by competitive pressures and spectrum amortisation and network costs from the continued expansion of their respective 4G networks. 

For the full year, net profit fell 43.5 per cent to S$3.09 billion, from S$5.47 billion a year ago, mainly due to an "exceptional gain" the previous year from its NetLink Trust divestment, and lower contributions from the trust as a result.

Singtel also saw losses from India associate Airtel; lower contributions from Indonesia associate Telkomsel; an erosion of carriage services and currency headwinds.

EPS for the full year was lower at 18.96 Singapore cents, from 33.53 cents a year ago.

Revenue for the fiscal year, meanwhile, inched up 0.6 per cent to S$17.37 billion, from S$17.27 billion a year ago.

Postpaid customer growth rose by 32,000 this quarter; while fixed services fell due to lower voice usage, mitigated by the growth in broadband services, the telco said.

Its top performing mobile service segment dropped 6 per cent to S$5.40 billion, from S$5.74 billion a year ago. The telco's data and internet segment also fell 2.8 per cent to S$3.34 billion, from S$3.44 billion a year ago.

Revenue for its sale of equipment segment was up 19.1 per cent to S$2.88 billion, from S$2.41 billion the year prior.

As for its digital business, revenue rose 11.9 per cent to S$1.25 billion, from S$1.11 billion a year ago. Singtel's ICT segment, meanwhile, grew by 0.9 per cent to S$3.03 billion, from S$3.01 billion a year ago.

Singtel said group revenue was mainly derived from Singapore and Australia, which accounted for 38 per cent and 52 per cent respectively of the total revenue. The remaining 10 per cent came from the United States and other countries Singtel operates in. 

In Australia, operating revenue went up by 10 per cent with the resumption of NBN migrations following the lifting of the temporary suspension on NBN's HFC network. Excluding NBN migration revenues, operating revenue increased 6.2 per cent on higher equipment sales and handset leasing. 

Postpaid handset customers in Australia rose 121,000, while prepaid customers declined by 109,000 from a clean-up of inactive subscribers by a wholesale customer. 

Singtel's group enterprise unit saw revenue decline 3 per cent for the quarter as a result of lower carriage revenue. ICT services rose 4 per cent by subsidiary NCS, while cyber security revenue rose 11 per cent from strong growth in Asia-Pacific. The telco added that ICT now contributes to 51 per cent of its group enterprise unit's revenue, from 48 per cent a year ago.

As for Singtel's group digital life unit, revenue rose 33 per cent on the back of contributions from Amobee's programmatic advertising business and contributions from Videology which it acquired in August 2018. Without Videology, revenue for the increased by 17 per cent, the telco added.

The markets in India and Indonesia were also affected by "intense competition" said Singtel group CEO Chua Sock Koong. 

Competitive pressure in Indonesia has since eased, with Telkomsel returning to year-on-year revenue growth and reversing declines during its SIM card registration exercise.

Airtel was affected by intense price competition which has "forced a sweeping market consolidation" resulting in fewer operators in India, Singtel said.

Thai associate AIS' earnings were impacted by higher network depreciation and spectrum amortisation, while Philippine's Globe delivered "another solid quarter" of revenue and earnings growth from both its mobile and broadband segments.

The group is expecting its consolidated revenue to grow by a mid single digit, with capital expenditure expected to be around S$2.2 billion. It is also expecting growth from its ICT services, cybersecurity revenue and subsidiary Amobee operating revenue.

"Looking ahead, we will accelerate our digitalisation efforts to drive better customer experience and improve productivity and cost structure by transforming our processes," Ms Chua said.

Through these efforts, Singtel aims to deliver cost savings and avoidance of around S$490 million for fiscal 2020.

In a separate announcement, Singtel said it has appointed Gail Kelly as an independent director and member of its audit committee. It also appointed Dominic Barton as a member of its finance and investment committee and of its risk committee. Both appointments take immediate effect. 

READ MORE: 'The numbers speak for themselves', Singtel CEO says after full-year earnings slide