Singtel's earnings plunge 77% - its worst quarter in 15 years
Local telco reports worst quarter in 15 years
A triple whammy of foreign currency movements, lower contributions from associate firms and a halt in Australia's broadband roll-out gave Singtel its worst quarter in 15 years.
Earnings for the three months to Sept 30 plunged 77 per cent to $667 million from the same period last year, the group reported yesterday.
Singtel also chalked up a $48 million exceptional loss in the second quarter, mainly on staff restructuring costs.
This compares with a one-off gain of $1.94 billion last year from the sale of units in NetLink Trust. Strip out the exceptional items, and underlying net profit fell 22 per cent to $715 million.
Revenue was flat at $4.27 billion but would have grown by 3.9 per cent in constant currency terms, said Singtel, which took hits across the board.
The digital life segment lost $34 million before interest, tax, depreciation and amortisation, up from $14 million previously.
Singtel has lowered its guidance for digital marketing unit Amobee to single-digit growth, down from the mid-teens projected in May.
Mr Samba Natarajan, chief executive of group digital life, told a briefing yesterday: "Our programmatic business ... is going quite well ...but the managed media business ... is beginning to decline."
The Singapore consumer segment reduced churn for the quarter and lifted operating revenue by 4.8 per cent to $555 million, led by a strong increase in equipment sales on premium handset launches.
Earnings before interest, tax, depreciation and amortisation declined 7.4 per cent to $180 million, with lower contributions from higher-margin legacy carriage services and absence of Singtel TV sub-licence revenue for the Premier League. The unit is also bracing itself for the entry of Australia's TPG Telecom.
Mr Yuen Kuan Moon, group chief digital officer and chief executive for the Singapore consumer business, said: "We hold our position that (having) three operators is sufficient for Singapore ... but we have to face a fourth operator.
"Our focus will always be on the customers and it continues to be even more important in the face of the competition."
The board approved an interim dividend of 6.8 cents a share for the half-year to Sept 30, unchanged from a year earlier.
Singtel shares closed down 1.91 per cent to $3.08 after the announcement. - THE STRAITS TIMES