M1 sees improved Q2 earnings on higher service revenue

M1 expects a softer six months ahead, estimating second-half profits to be lower in view of market seasonality and impending new competition. The board has declared an interim dividend of 5.2 Singapore cents a share, flat on the previous year.
M1 expects a softer six months ahead, estimating second-half profits to be lower in view of market seasonality and impending new competition. The board has declared an interim dividend of 5.2 Singapore cents a share, flat on the previous year.ST PHOTO: SEAH KWANG PENG

M1 warned of a softer six months ahead, even as it posted higher second-quarter earnings amid the popularity of SIM-only plans.

Net profit stood at $36.2 million for the three months to June 30, up by 1.5 per cent on the previous year, according to unaudited financial statements out on Friday.

This was in line with a 1.7 per cent rise in operating revenue to $253.2 million, which came as improved mobile and fixed service revenue offset the dip in handset sales.

Mobile service revenue grew by 3.8 per cent on the year before, to $146.2 million, with a 34,000 quarter-on-quarter increase in the post-paid customer base. Net post-paid average revenue per user (ARPU) ticked up by 1.2 per cent year on year to $42.3.

Chief financial officer Lee Kok Chew told an earnings call that the numbers were up on SIM-only plan growth, seen at both the telco and mobile virtual network operator partner Circles.Life, "but we're not able to give you a breakdown".

Fixed service revenue grew by 27.4 per cent to $36.7 million, with M1 reporting "strong growth across both corporate and residential segments". It added 6,000 fibre customers in the quarter, to 200,000 in all, with net ARPU up by 4.6 per cent on the previous year to $38.6.

Net profit edged higher by 0.8 per cent for the six months, to $71 million, on a 1.1 per cent increase in operating revenue, to $507.3 million.

  • AT A GLANCE

  • REVENUE: $253.2 million (+1.7%)

  • NET PROFIT: $36.2 million (+1.5%)

But M1 noted in its announcement: "Based on current outlook and barring any unforeseen circumstances, we estimate second-half profits to be lower in view of market seasonality and impending new competition."

It had earned about $69 million in the second half of last year.

TPG Telecom is set to come in as a mobile network operator and Mr Lee added: "Typically, for the second half, you see a lot more marketing activities, seasonal promotions."

The board has declared an interim dividend of 5.2 Singapore cents a share, flat on the previous year.

A version of this article appeared in the print edition of The Straits Times on July 28, 2018, with the headline 'M1 sees improved Q2 earnings on higher service revenue'. Print Edition | Subscribe