Management Discussion and Analysis
- Includes the effects from adoption of SFRS(I) 16, Leases, from 1 April 2019 on a prospective basis.
- Assuming constant exchange rates for the Australian Dollar and United States Dollar from FY 2019.
- Comparatives have been adjusted to exclude certain digital businesses (mainly Singtel Dash) transferred to ‘International Group’ from 1 April 2019.
- Comprises mainly mobile financial business, and gaming and digital content business. EBITDA and EBIT include the corporate costs of International Group which also supports the Group’s regional investments. The results here do not include the equity accounted results of the regional associates which are shown under the ‘Associates’ section.
Operating revenue and EBITDA grew 1.2% and 2.8% respectively, boosted by NBN migration revenues which peaked during the year. Excluding NBN migration revenues, operating revenue and EBITDA fell 4.4% and 15% respectively, reflecting lower contributions from retail fixed and equipment sales. Retail fixed margins declined on a higher mix of NBN customers which grew a strong 251,000 from a year ago but resulted in adverse margin impact. Equipment sales revenue and margins declined, reflecting lower sales volume, price competition and lower handset vendor rebates. Mobile service revenue declined 4.7% on higher SIM-only plan adoption and intense data price competition. For the year, strong postpaid additions drove an increase of 167,000 in total mobile customer base(1). EBIT fell 19% after including depreciation and amortisation charges which rose 22% mainly from right-of-use assets, and would have declined 65% excluding NBN migration revenues.
In Singapore, competition remained intense. Mobile operators launched all-digital brands and the fourth mobile network operator commercially launched at end of March 2020. Operating revenue declined 5.5% with reductions in mobile, TV and fixed voice partly mitigated by growth in fixed broadband. Excluding the 2018 FIFA World Cup revenue last year, TV revenue would have been stable. Equipment sales declined 3.9% due mainly to the supply disruption for certain premium handsets and soft consumer sentiment from COVID-19 in the March quarter. Mobile service revenue fell 7.5% on continued voice erosion, lower roaming and prepaid revenues, as well as the impact from amortisation of handset subsidies. For the year, the number of postpaid customers(1) grew by 130,000 as GOMO and SIM-only plans gained traction. EBITDA, however, rose 1.2% on strong cost management, wage credits and recovery of infrastructure costs from a telco operator. EBIT remained stable after including higher depreciation from right-of-use assets.
Operating revenue and EBITDA decreased 4.8% and 6.4% respectively on continued declines in legacy services especially voice, aggressive price competition as well as weak business sentiment. Excluding Australia, both operating revenue and EBITDA would have been stable. ICT revenue, which constituted 51% (FY 2019: 48%) of Group Enterprise’s revenue, was stable but grew 1.5% in constant currency terms with growth in Singapore offsetting lower sales in Australia. In Singapore, ICT revenue grew strongly at 6.7% driven by NCS and higher data centre revenue boosted by new wins and service turn-on for a large customer. NCS delivered robust revenue growth of 7.0% and closed the year with a strong order book of S$3.2 billion from new wins and key contract renewals. The Australia business faced challenging market dynamics, legacy product declines, pricing pressures as well as weaker demand especially from the government and financial sectors. EBIT declined by 21% after including higher depreciation from right-of-use assets and amortisation of software intangibles.
Group digital life
Operating revenue declined 6.4% due mainly to lower revenues from digital marketing arm Amobee and video-on-demand streaming service HOOQ, which was placed under liquidation in March 2020. Amobee’s revenue fell 7.9% as growth in programmatic platform business was negated by continued declines in legacy managed media and social businesses, and spending cuts by certain key customers. Despite lower operating revenue, negative EBITDA fell 47% with cost management and lower losses from HOOQ partly on cessation of its operations. Including higher depreciation and amortisation charges from investments in technology platform and right-of-use assets, negative EBIT reduced by 8.0%.
Operating revenue increased mainly from the growth in Dash’s remittance and payment services as well as sponsorship revenue for PVP Esports. Dash’s monthly active user base rose 84% and remittance transaction counts grew 71% from a year ago with increased scale. EBITDA and EBIT losses increased on continued ramp-up of the digital businesses.
- Includes Enterprise mobile customers.