A fall in traditional telecommunications services and international calls along with higher customer acquisition costs dented M1's fourth- quarter earnings.
Net profit for the three months to Dec 30 fell 27.1 per cent from the same period a year earlier to $31.8 million. This came despite a small rise in operating revenue of 1.9 per cent to $313.9 million.
While M1 has been suffering from lower handset sales, it made a strong showing in the fourth quarter with turnover in this area growing 14.2 per cent to $112.8 million.
However, handset sales for the year were still down 23.7 per cent to $255.4 million.
Despite the entry of a new telco provider, M1 continued to grow its customer base.Its total number of customers rose 6 per cent to 2.18 million as at Dec 31, up from 2.06 million at the same point in 2015. M1 said its mobile market share was 23.7 per cent as at Oct 31 last year.
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AT A GLANCE
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NET PROFIT: $31.8 million (-27.1%)
OPERATING REVENUE: $313.9 million (+1.9%)
TOTAL DIVIDEND PER SHARE: 12.9 cents
However, the growth in customer numbers came at a hefty price. Customer acquisition costs increased 10.1 per cent for the fourth quarter to $438 compared with the same period a year earlier, and were up 22.7 per cent from the third quarter.
Fixed services were the silver lining, with revenue up 9.9 per cent in the quarter to $27.2 million and ahead by 21.4 per cent to $104.2 million for the full year.
Fixed services now account for 12.9 per cent of M1's total service revenue, compared with 10.4 per cent a year ago - driven by a larger base of residential, corporate and government customers, it said.
But service revenue - which comprises turnover from mobile, fixed and international call services - dipped 2 per cent to $805.5 million for the full year.
Total operating revenue for the year fell 8.3 per cent to $1.06 billion compared with the previous year, while net profit fell 16.1 per cent to $149.7 million.
Earnings per share for the fourth quarter dipped 26.5 per cent to 3.4 cents, while net asset value declined from 44.1 cents as at Dec 31, 2015, to 43.4 cents.
M1 has recommended a final dividend of 5.9 cents per share, bringing the total dividend to 12.9 cents per share for the year, down from the 15.3 cents per share payout in 2015.
