Weak handset sales weigh on Singtel

Singtel faced revenue pressure in its fiscal second half of 2022 (ending March 31) due to a resurgence of Covid-19 (coronavirus), structural challenges in its legacy businesses and a decline in equipment sales in its two main markets, Singapore and Australia.

In his earnings release, CEO Yuen Kuan Moon noted that the macroeconomic and geopolitical outlook remains uncertain due to supply chain disruptions, rising inflation and rising interest rates. However, he expects Singtel to benefit from a resumption of international travel as borders reopen.

Net profit increased more than tenfold year-on-year to SGD994.5 million ($726.1 million) due to exceptional gains. After-tax profit contributions from regional associates increased 18%, driven by the turnaround of Bharti Airtel in India.

Operating revenue fell 6.5% to $7.7 billion.

Singtel’s Consumer Group operating revenue fell 6% to SGD897 million, with mobile sales up 1.7% to SGD382 million due to a gradual recovery in roaming revenue thanks to the easing of travel restrictions and the increased adoption of 5G.

Equipment sales fell 21.1% to SGD216 million.

The number of prepaid subscribers fell by 4.6% to 1.3 million and the number of postpaid subscribers increased by 2.3% to 2.8 million.

Blended ARPU increased 2.6% to SGD 24, postpaid up 1.4% to SGD 29 and prepaid down 3.1% to SGD 12.

Average data consumption per customer increased by 30.6% to 9 GB per month.

Fixed broadband revenues increased by 5.6% to SGD 136 million and pay TV decreased by 7.7% to SGD 87 million.

Optus reported a 4.5% increase in mobile revenue to AUD1.7 billion ($1.2 million), offset by a 25.6% drop in equipment sales to AUD693 million.

Its subscriber base grew 2.8% to 10 million, with balanced gains in prepaid and postpaid services.

Blended ARPU increased 8.1% to AUD 31 and monthly data usage increased 12.5% ​​to 12GB.

Operating revenue fell 9.4% to AUD 3.3 billion as NBN migration revenue fell 78.4% to AUD 18 million.

Group business revenue fell 2.5% to S$1.9 billion due to lower enterprise voice revenue, and ICT revenue remained stable.

Singtel forecasts FY2023 capital expenditure of SGD2.6 billion versus SGD2.4 billion, with the lion’s share reserved for Optus.

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Casey J. Nelson