Singtel's Q4 profit falls 19%, full-year earnings up 42%

For the full year, Singtel's revenue grew 4.9 per cent to $17.53 billion, up from $16.7 billion, while net profit rose to $5.45 billion. Earnings per share was 33.4 cents, versus 23.96 cents last year.
For the full year, Singtel's revenue grew 4.9 per cent to $17.53 billion, up from $16.7 billion, while net profit rose to $5.45 billion. Earnings per share was 33.4 cents, versus 23.96 cents last year.PHOTO: DIOS VINCOY JR FOR THE STRAITS TIMES

Quarterly gains hurt by forex movements, weak contributions from its regional associates

Telco Singtel posted a 19 per cent fall in net profit for the fourth quarter, it reported yesterday.

Earnings were $781 million for the three months to March 31 from a year earlier, while revenue expanded 0.4 per cent to $4.326 billion. Earnings per share were 4.78 cents compared with 5.90 cents last year.

Singtel said it was hit by currency movements, a temporary suspension in connecting and migrating customers to Australia's National Broadband Network and lower associates' contributions from Telkomsel, Airtel and NetLink NBN Trust. Post-tax profit contributions from Telkomsel in Indonesia fell 22.1 per cent to $219 million.

Singtel's International chief executive Arthur Lang told a briefing: "It is not just a weakness in Telkomsel. Actually, the whole industry went through a bit of an adjustment in this past quarter."

He cited factors such as data revenue growth not keeping up with the decline in traditional services, because of "a deluge of pre-activated SIM cards", which "depressed the prices temporarily".

Revenue grew 4.9 per cent to $17.53 billion for the full year, up from $16.7 billion, while net profit rose by 41.5 per cent to $5.45 billion.

  • AT A GLANCE

    REVENUE: $4.33 billion (+0.4%)

    NET PROFIT: $780.6 million (-19%)

    FINAL DIVIDEND PER SHARE: 10.7 cents (unchanged)

Earnings per share was 33.4 cents, versus 23.96 cents last year.

Group chief Chua Sock Koong said in a statement: "These results reflect the strong execution of our digital transformation strategy in both our core and new digital businesses... Optus gained market share in Australia ... while our ICT and digital businesses now account for 24 per cent of revenue."

The Singapore consumer business saw mobile service revenue down by 6 per cent in the quarter. Division CEO Yuen Kuan Moon said turnover is expected to decline in the coming year: "The industry is moving away from the traditional revenue of voice, and into data.

"So, very similar to other markets, you are seeing this shift, and this shift will take time for data growth to actually fully mitigate the decline in traditional voice."

But he added that "we expect the market to be very vibrant" on the entry of multiple mobile virtual network operators (MVNOs).

"We also expect a few more MVNOs coming onto the market in the next few months. As long as there is interest on MVNOs, we'll be prepared to work with them to see how we can supply them with our network service to cover different segments of the market."

Singtel has proposed a final dividend of 10.7 cents a share, bringing the total payout for the year to 17.5 cents a share. It also paid out a special dividend of three cents a share in January on proceeds from the NetLink NBN Trust divestment.

The telco said that it " expects to maintain its ordinary dividends of 17.5 cents a share for the next two years".

It will then revert to paying out between 60 per cent and 75 per cent of underlying net profit.

Singtel shares closed two cents up at $3.44 yesterday.

A version of this article appeared in the print edition of The Straits Times on May 18, 2018, with the headline 'Singtel's Q4 profit falls 19%, full-year earnings up 42%'. Print Edition | Subscribe