M1's Q4 profit dips 2.5% on slide in handset sales

A slide in handset sales hit earnings at M1 in the fourth quarter, although numbers in other parts of the business were more robust.

Net profit came in at $31 million for the three months to Dec 31 - down 2.5 per cent on the previous year. Operating revenue declined 2.1 per cent to $307.2 million.

M1, which has largely made its mark in the consumer mobile business, saw mobile service revenue rise by 4.1 per cent for the quarter although international call services fell. It is backing its tie-up with mobile virtual network operators.

Chief financial officer Lee Kok Chew told a briefing: "What I can say is that they add to our customer base, they contribute positively to our revenue and also to our earnings."

Circles.Life was the first such operator here, riding on M1's network, in 2016.

Full-year net profit slid 11.5 per cent to $132.5 million despite a 1 per cent uptick in operating revenue to $1.07 billion, due to increased depreciation and amortisation expenses and a higher interest outlay. Competition is expected to increase this year, with the anticipated entry of new mobile service providers, the company said yesterday. The growth in fixed services pointed to how incumbent telcos have shifted their play. Fixed-services revenue made up 15.7 per cent of service revenue for the full year - up from 12.9 per cent the year before.

As the company reinvents itself as a "smart communications provider", it said it is progressively scaling up its infocomm technology capabilities and digital services portfolio to capture opportunities from the Internet of Things and Singapore's Smart Nation drive.

  • AT A GLANCE

  • REVENUE: $307.2 million(-2.1%) 

    NET PROFIT: $31 million(-2.5%) 

    DIVIDEND PER SHARE: 6.2 cents

"The digitalisation will improve operational efficiency and enhance our customer touch-points," chief executive Karen Kooi said in a statement.

M1 has proposed a final dividend of 6.2 cents a share, to be paid on April 27, bringing the full-year payout to 11.4 cents a share against 12.9 cents in 2016.

M1 shares closed up one cent to $1.87 before the results were announced.

A version of this article appeared in the print edition of The Straits Times on January 24, 2018, with the headline 'M1's Q4 profit dips 2.5% on slide in handset sales'. Print Edition | Subscribe