Group Five-year Financial Summary
This has been a challenging year, given structural shifts in the industry, soft economic conditions, adverse regulatory outcomes in India and the onset of COVID-19 in the fourth quarter. With a 6% depreciation in the Australian Dollar, operating revenue declined 4.8% to S$16.54 billion and EBITDA fell 3.2% to S$4.54 billion. In constant currency terms, operating revenue dipped 2.0% mainly from lower mobile service revenue and equipment sales while EBITDA remained stable on reduction in operating lease expenses under the new lease accounting standard. EBIT (before associates) reduced 19% after including depreciation of right-of-use assets.
Underlying net profit fell 13% to S$2.46 billion, with increased net losses at Airtel and weakness at Australia Consumer due to continuing data price competition, lower equipment sales and margins, and low NBN resale margins.
Net profit declined 65% to S$1.08 billion due to net exceptional losses of S$1.38 billion mainly arising from share of Airtel’s exceptional charges for regulatory costs, including the adjusted gross revenue matter and a one-time spectrum charge.
The Group executed well on its strategy amid challenging conditions and gained market share in mobile across both Singapore and Australia. Operating revenue was stable at S$17.37 billion while EBITDA declined 7.1% to S$4.69 billion due partly to a 6% depreciation in the Australian Dollar. In constant currency terms, operating revenue grew 3.7% driven mainly by increases in ICT, digital services and equipment sales. However, EBITDA was down 3.9% mainly due to lower legacy carriage services especially voice, and price erosion.
The associates’ pre-tax contributions declined a steep 38% to S$1.54 billion mainly caused by operating losses at Airtel and a lower contribution from Telkomsel amid aggressive price competition in India and Indonesia respectively. The decline was partly mitigated by double-digit profit growth at Globe in the Philippines with robust revenue growth in mobile and broadband.
With lower contributions from the associates, underlying net profit declined 21%. Net profit was S$3.10 billion, down 44% from FY 2018(1) .
The Group delivered record earnings for FY 2018 with net profit of S$5.45 billion bolstered by an exceptional gain of S$2.03 billion from the divestment of units in NetLink Trust and a strong core performance. Operating revenue was S$17.53 billion, 4.9% higher than FY 2017, while EBITDA rose 1.8% to S$5.09 billion reflecting strong customer gains in Australia and the first-time contribution from Turn, which was acquired by Amobee in April 2017. In constant currency terms, operating revenue and EBITDA increased by 4.7% and 1.5% respectively.
The associates’ pre-tax contributions declined 15% to S$2.46 billion on weaker earnings from Airtel India and Telkomsel due to intense competition and the mandated reduction in mobile termination charges in India, as well as a lower contribution from NetLink NBN Trust following the reduction in economic interest of 75.2% in July 2017. The decline was partly mitigated by a higher contribution from Intouch which was acquired in November 2016.
With lower associates’ contributions, higher depreciation and amortisation charges on network investments and spectrum, as well as increased net finance expense, underlying net profit declined 8.4%.
The Group delivered resilient earnings amid heightened competition across all the markets the Group operated in. Operating revenue was S$16.71 billion, 1.5% lower than FY 2016 but would have increased 2.0% excluding the impact of regulatory mobile termination rates change in Australia from 1 January 2016. EBITDA remained stable at S$5.0 billion. The Australian Dollar appreciated 2% against the Singapore Dollar. In constant currency terms, operating revenue and EBITDA decreased by 2.6% and 1.5% respectively.
The associates’ pre-tax contributions rose 5.4% to S$2.94 billion despite weakness in Airtel which faced intense price competition in India. Strong growth at Telkomsel and NetLink Trust, as well as the first-time contribution from Intouch, which was acquired in November 2016, was partly offset by lower profits at Airtel, AIS and Globe.
Underlying net profit grew 2.9% and net profit was stable at S$3.85 billion with an exceptional loss compared to an exceptional gain in FY 2016.
The Group delivered a strong performance with resilient core business and robust contributions from associates. Operating revenue was S$16.96 billion, 1.5% lower than FY 2015 with the Australian Dollar declining a steep 9% against the Singapore Dollar and the impact of lower mobile termination rates in Australia from 1 January 2016. In constant currency terms, operating revenue would have grown 4.1% across all business units with first-time contribution from Trustwave, Inc., a newly acquired cyber security business. EBITDA was S$5.01 billion, 1.5% lower than FY 2015 and in constant currency terms, would have increased 4.1% with strong cost management.
The associates’ pre-tax contributions rose 8.2% to S$2.79 billion and would have increased 9.7% excluding the currency translation impact. The regional associates recorded strong customer and mobile data growth, with higher earnings from Telkomsel and Globe offsetting the decline in Airtel.
Underlying net profit was stable and net profit including exceptional items increased 2.4% to S$3.87 billion. In constant currency terms, underlying net profit and net profit would have increased 4.0% and 5.5% respectively from FY 2015.
- Included gain on disposal of economic interest in NetLink Trust of S$2.03 billion.