SINGTEL posted a net profit of S$532 million for the third quarter ended December 2022, down 27.6 per cent year on year from a higher base of S$734 million.

This comes after recording a net exceptional loss of S$28 million as opposed to a net exceptional gain of S$261 million the prior year – then boosted by a net gain on disposal of the telecommunications provider’s 70 per cent equity stake in Indara Corporation, then known as Australia Tower Network.

In a business update on Thursday (Feb 16), Singtel said that its latest quarter’s net exceptional loss was mainly due to significant receivable provision by Airtel’s tower associate for a major customer. Airtel is partly owned by Singtel.

Operating revenue for Q3 fell 5.1 per cent year on year to S$3.7 billion from S$3.9 billion in the absence of contributions from the group’s divested subsidiary Amobee, and with a steep decline in the Australian dollar over the period.

For the same reasons, Ebitda (earnings before interest, taxes, depreciation and amortisation) was down 8 per cent to S$911 million from S$990 million the previous year.

Underlying revenue – which is on a constant currency basis, and excludes contributions from Amobee and Optus’ migration of its customers to Australia’s national broadband network – would have risen 6 per cent and underlying Ebitda down by 3.2 per cent.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Underlying net profit rose 18 per cent to S$559 million from S$473 million, and this was attributed to the strong growth momentum of Airtel.

In Singapore, the group’s consumer business’ operating revenue rose 3 per cent due to higher mobile service revenue, which grew on the back of increased travel and higher pre-paid sales driven by 5G and the return of foreign workers. This was partially offset by lower pay TV revenue as well as mobile equipment sales, which contracted due to supply constraints of certain premium handsets and reduced demand for mobile equipment plans.

Ebitda for the Singapore consumer segment grew 13 per cent on the back of the higher service revenue. Group enterprise operating revenue fell a marginal 0.8 per cent as higher roaming and ICT (information and communications technology) revenues were offset by declines in mobile equipment sales and voice. Overall, the group said this segment’s 1.3 per cent decline in Ebitda reflected a higher mix of lower margin products.

Despite achieving strong revenue growth of 21 per cent, Singtel’s technology services arm NCS reported a 29 per cent decline in Ebitda due to higher operating expenses. The group said that NCS is taking steps to optimise its overall cost structure and deliver improved margins.

Operating revenue of Singtel’s cybersecurity arm in the US, Trustwave, fell 55.1 per cent over the quarter after transferring its Asia-Pacific business to Singtel, NCS and Optus as at Apr 1, 2022. Its Ebitda loss narrowed slightly due to tight cost management, said the group. 

For the nine months ended December 2022, Singtel’s operating revenue was down 5.1 per cent at S$11 billion and Ebitda was down 4.5 per cent at S$2.8 billion.

This was mainly due to the absence of NBN migration revenue and contributions from Amobee, exacerbated by depreciation of the Australian dollar.

On an underlying basis, operating revenue for 9M FY2023 would have grown 4.9 per cent, and Ebitda would have risen marginally by 0.8 per cent.

Commenting on the latest set of results, Singtel group chief executive Yuen Kuan Moon said that he expects NCS’ margins to improve as the cost of scaling and business eases in the coming quarters. “We are keeping a tight rein on the group’s business costs in the current inflationary environment while balancing the need to invest in growth and innovation as we steadily execute on our strategic priorities against this uncertain economic backdrop,” he added.

Shares of Singtel : Z74 0% ended Wednesday S$0.05 or 2 per cent lower at S$2.45.