Singtel has reported a 7% decline in net profit for the first quarter of its financial year, mostly as a result of a reduced contribution from the group's regional mobile associates.
Net profit for the June quarter declined to S$832 million ($610.1 million), with underlying net profit down 19% to S$733 million.
Weaker results from Singtel's mobile associates, particularly India's Bharti Airtel and Indonesia’s Telkomsel, contributed to the decline.
Singtel's bottom line was also impacted by its divestment of just over 75% of its stake in NetLink Trust (now NetLink NBN Trust), resulting in a reduced competition from the company.
NetLink Trust was the company Singtel established in 2011 to own and operate the passive infrastructure assets for Singapore's next-generation nationwide broadband network (NG-NBN). Singtel was required to reduce its stake in NetLink Trust to below 25% by this year as a condition of securing the NG-NBN contract, and the company completed a $1.7 billion IPO in July.
Singtel's operating revenue for the quarter meanwhile grew 2% in constant currency terms to S$4.13 billion, due in large part to a 5% increase in revenue at the company's wholly-owned Australian subsidiary Optus.
In Singapore, consumer revenue grew 2%, but mobile revenue continued to be impacted by voice to data substitution as well as an increase in demand for SIM-only plans. Group enterprise revenue also fell 3% in constant currency terms.
“This quarter’s results reflect the resilience of our core business against intense competition and increasing business headwinds. The group continued to record data growth and Optus made gains in both the consumer and enterprise markets, bolstered by our quality networks, differentiated content and comprehensive ICT capabilities,” Singtel Group CEO Chua Sock Koong said.
“Our overall focus on digitalization and automation has also improved customer engagement and delivered productivity gains and cost saving. We start the year with 23% of Group revenue from ICT and digital businesses and we expect contributions from these businesses to rise further as we continue to build capabilities in these new growth areas.”