Singtel Q2 revenue falls 2.3%
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Singtel has reported a 2.3% decrease in group revenue for its fiscal second quarter to S$4.08 billion (2.89 billion), as the company felt the impact of regulatory changes in Australia.
Australian competition regulator ACCC’s decision last year to cut termination rates from 3.6 to 1.7 cents per minute impacted the performance of Singtel’s wholly-owned Australian subsidiary Optus. Excluding this impact, revenue would have grown 2% to S$4.28 billion.
The impact of the rate cut contributed to Singtel reporting an 8% decline in its group consumer revenue, covering both Singapore and Australia. In Singapore, revenue fell 3% due largely to lower handset sales and a rise in penetration of lower-priced Android handsets.
Group enterprise revenue by contrast grew 5% on the back of strong demand for cyber security and international data services.
Net profit fell 6% year-on-year to S$972 million, due to exceptional gains recorded by Indian mobile affiliate Airtel in the previous corresponding quarter.
Underlying net profit by comparison was stable for the quarter and up 3% for the first half of the financial year.
Regional mobile associates’ pre-tax profit contributions grew 7% to S$679 million as a result of strong operating results from Airtel and Indonesia’s Telkomsel. The latter’s pre-tax profit jumped 22% as it reaped the results of investments in its voice, data and digital businesses.
The group’s total customer base – including its mobile affiliates – grew 3% to 629 million subscribers.
Singtel is currently projecting a low single digit decline in group operating revenue but stable ebitda for the full year.
Questions & Answers
Q.What was the main reason for the overall drop in Singtel's revenue for the quarter?
What was the main reason for the overall drop in Singtel's revenue for the quarter?
The primary reason for the revenue decrease was the Australian competition regulator ACCC's decision to cut termination rates. This regulatory change significantly impacted the performance of Singtel's Australian subsidiary, Optus, leading to an 8% decline in group consumer revenue.
Q.Which business segments performed well despite the overall revenue decline?
Which business segments performed well despite the overall revenue decline?
Group enterprise revenue saw a 5% increase, driven by strong demand for cyber security and international data services. Also, regional mobile associates contributed positively, with pre-tax profit growing 7% due to strong operating results from Airtel and Telkomsel.
Q.How did Singtel's net profit compare to the previous year, and what was the underlying trend?
How did Singtel's net profit compare to the previous year, and what was the underlying trend?
Net profit fell 6% year-on-year to S$972 million, mainly due to exceptional gains recorded by Indian mobile affiliate Airtel in the prior corresponding quarter. However, underlying net profit remained stable for the quarter.
Q.What was the specific impact of the regulatory changes in Australia on Singtel's revenue?
What was the specific impact of the regulatory changes in Australia on Singtel's revenue?
The Australian competition regulator ACCC cut termination rates from 3.6 to 1.7 cents per minute, directly impacting Optus's performance. This rate cut was the main factor contributing to an 8% decline in Singtel's group consumer revenue, which covers both Australia and Singapore.
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