M1 profit falls 7.2% in H1

Singapore’s M1 has reported a 7.2% year-on-year decline in net profit for the six months ended in June, partly as a result of a 44% slump in handset sales.

The operator reported a net profit of S$83.5 million ($61.8 million), on the back of flat revenue of S$407.3 million.

While M1 added 14,000 postpaid and 24,000 prepaid customers during the six month period, bringing its total mobile customer base to 1.98 million, total handset sales fell to S$91 million. For the second quarter, handset sales declined by 50% year-on-year to S$36 million.

Mobile data’s contribution to total revenue increased by 9.1 percentage points to 54%, with average postpaid mobile data usage growing by 100MB year-on-year to 3.3GB.

On the fixed line front, service revenue grew 26.7% to S$50 million, or 12.3% of service revenue. M1 added 9,000 residential and corporate fiber customers in the first half, bringing its base to 145,000.

Based on the current economic outlook, M1 announced that it now expects a single-digit decline in net profit for the full year 2016.

“We are investing in new technologies and capabilities, and building up a portfolio of digital solutions to enhance our service propositions and cater to changing customer needs,” M1 CEO Karen Kooi commented.

“While expenditure is incurred upfront, meaningful contribution will only be upon achieving scale in service adoption over future years.”