Singtel’s quarterly revenue drops 14 EBITDA down 24% on lower equipment sales, mobile business

Singaporean operator Singtel posted operating revenue of SGD 3.54 billion for its first quarter ended 30 June, which represents a decline of 14 percent. Singtel’s performance reflected softening economic and market conditions, exacerbated by COVID-19 and ongoing price competition, the company said. EBITDA dropped 24 percent to SGD 897 million after including Jobs Support Scheme credits, and EBIT before associates’ contributions was 52 percent lower at SGD 262 million. These declines were due mainly to lower equipment sales, roaming and prepaid mobile revenues, delays or deferments of some ICT projects and reduced customer spending.

Earnings declines at Telkomsel, AIS and Globe due to the impact of COVID-19 were mitigated by a lower net operating loss in Airtel India following tariff increases in December 2019. Singtel took a net exceptional charge of SGD 364 million. This mainly comprised Singtel’s share of Airtel’s additional provisions for the adjusted gross revenue matter following the Supreme Court of India’s decision in July and exceptional tax charges, partly offset by a dilution gain of SGD 550 million on Singtel’s reduced equity interest in Airtel following a successful share placement with institutional investors by Bharti Telecom.

Revenue for the Group Consumer business in Singapore fell 22 percent, as measures to counter COVID-19 dampened business and consumer sentiment. Mobile service revenue declined as a result of a sharp fall in roaming and lower prepaid usage as customers relied on WiFi as they stayed indoors and the number of tourists and foreign workers fell significantly with travel and movement restrictions. These restrictions also led to declines in equipment sales during the period. EBITDA fell 14 percent.

In Australia, revenue was down 11 percent, negatively affected by lower mobile revenue. Mobile service revenue declined due to lower roaming, late payment fee waivers as well as a higher SIM-only customer mix and ongoing data price competition. Equipment sales also fell given lower retail footfall, impact of lengthening handset replacement cycles and cessation of subsidies. EBITDA fell 32 percent while EBIT declined 82 percent on lower operating revenue, fixed margin erosion and operating expenses related to COVID-19 such as onshore care agents and debt provisions.

Singtel’s Group Enterprise business saw similar impact from the pandemic with revenue down 4.5 percent mainly due to continued declines in carriage services and weak business sentiment. Mobile service revenue was lower with steep declines in roaming and voice. Equipment sales also declined from lower mobile connections. ICT revenue growth was affected by project delays and deferments as customers scaled back their operations as a result of a drop in business activities. However, data centre revenue increased with new wins. EBITDA fell 13 percent.

Group Digital Life’s operating revenue plunged 49 percent, with lower revenue from Amobee and the cessation of HOOQ’s business in March this year. Amobee saw significant cut backs in advertising spend by customers due to COVID-19 and a reduction in TV revenue as the technology licensing fee income recognised in the last corresponding quarter did not recur this quarter. Negative EBITDA widened to SGD 18 million.