Singapore Telco: M1's half-year net profit slumps 17.6% to S$68.8m

M1's mobile telecommunications and international call services clocked in a revenue of S$345 million in the first half of the year.

Singapore economy expands by 1.8 per cent in Quarter 1
The skyline of the central business district in Singapore Reuters

Singapore telco player M1 reported a fall in net profit after tax, down 17.6 percent to S$68.8 million in the first half of the year. According to the group, the slump in the bottom line was partly driven by higher depreciation and interest expense.

For the said period, the group recorded a stable service revenue of S$406.2 million. Meanwhile, fixed services posted robust growth across both corporate and residential segments, with the segment revenue increasing 22.3 percent to S$61.2 million compared to last year. Fixed services accounted for 15.1 percent of overall service revenue.

Meanwhile, M1's mobile telecommunications and international call services clocked in a revenue of S$345 million for the said period.

The telco reported that it added another 8,000 in its fibre customer base, reaching 176,000 in the second quarter of the year. After the shutting down of its 2G network in April, customers who were previously on 2G data were migrated to its machine-to-machine (M2M) platform. These customers are not included in its mobile base.

For the past quarter ending in June, it shed 2,000 mobile customers, bringing its consumer base to 2.04 million, with mobile churn rate inching higher at 1.7 percent.

In terms of average postpaid smartphone data usage, there was an increase to 3.9GB per month in 2Q17, from 3.3GB per month a year ago. The contribution of mobile data increased 1.5 percentage points to 55.5 percent of the group's service revenue in the latest quarter.

M1's Board of Directors has declared an interim dividend of 5.2 Singapore cents per share.

M1 Chief Executive Officer Karen Kooi noted that despite some weak figures in the group's performance in the past quarters, the telco is well positioned to capture new opportunities as the economy turns digital.

"We have been investing in narrowband-Internet of Things network and digital solutions and expanded our offerings to include managed infrastructure services, cyber security, business solutions and analytics. This would enable us to better serve our customers and generate new revenue streams for future growth," she said in a statement to the media.

Based on its performance, the group forecasts a decline in its net profit after tax for the current financial year.