Singtel's Q3 profits slid 14.2% to $823m

It blamed lower NBN migration and an increased shift from voice to data services.

Singtel’s profits extended its Q2 downward spiral with its Q3 profits slipping 14.2% YoY to $823m from $959m, an announcement revealed. On the other hand, revenue inched up 0.9% YoY to $4.63b from $4.58b.

The firm’s results were largely impacted by the weaker Australian dollar, lower NBN migration and voice revenues, as well as declines in its associates’ contributions mainly from Airtel, it explained in its financial statement. It also cited intense competition in India and margin erosion in its traditional carriage services as additional weights which further dragged its earnings.

Also read: Singtel's Q2 profits plummeted 77% to $667m

In Singapore, operating conditions to be fiercely competitive with consumer revenue falling 5.7% YoY due to declines in equipment sales and voice revenues. As a result, earnings before interest, tax, depreciation and amortisation (EBITDA) slipped 3.2% YoY. On the other hand, operating revenue in Australia rose 6%, whilst EBITDA dropped 8.3%.

Group Enterprise contributed 35% and 36% to the firm’s operating revenue and EBITDA, respectively. Revenue was said to be stable, growing 2% in constant currency terms due to higher ICT sales, though it was partly offset by continued declines in traditional legacy services. Group Enterprise revenue was up 1%, with 9% growth in ICT services.

“We have stayed the course despite heightened competition and challenging market and economic conditions,” Singtel’s CEO Chua Sock Koong said in a statement. “We’ve continued to add postpaid mobile customers across our core business in Singapore and Australia, whilst making positive strides in the ICT and digital space.”

Also read: Singtel's headwinds will persist unless ICT segment recovers: analyst

In January, Singtel’s subsidiary Optus launched Australia’s first commercial 5G service in Sydney and Canberra, which will cover 1,200 sites by March 2020 as it leverages an unparalleled 5G spectrum holdings nationally.

On the home services front, Singtel continued to review its price plans and secure rights to content offerings such as HBO and Premier League to offset the declines in voice and TV. In addition, it entered the electricity-reselling business under its partnership with YTL PowerSeraya’s energy provider unit Geneco to offer electricity plans which will be resold through Singtel Power.

Similarly, Singtel expanded the capabilities and reach of its mobile financial service Dash with strategic partnerships with Visa and Apple Pay. It also plans to offer remittance services to Myanmar through Dash, adding to the five countries that it already serves.

With the Group’s overall performance affected by the global economic slowdown and weaker sentiment, Singtel said it does not expect data revenue growth to offset the decline in voice revenues.

That being said, it forecasts mobile service revenue in Australia to be stable, and ICT revenue to increase by low single digit by the end of the financial year on 31 March.