SingTel CEO puts positive spin on tough Q3

New SingTel Group Chief Executive Yuen Kuan Moon called it a “second straight quarter of revenue recovery,” but that seemed a bit of spin. Yes, for the three months ended December 31 – SingTel's fiscal Q3 – revenue was indeed up 8.9% compared with the previous quarter. Given typical seasonal swings, however, you might expect some quarter-on-quarter uptick in SingTel's Q3 anyway.

Figure 1: Popping up: Revenues are up at Singtel - but all might not be quite as it seems. (Source: Fitch)

By the Group's own admission, which, aside from Singapore, owns operators in Southeast Asia, Australia and India, the top-line surge compared with Q2 was driven mainly by higher equipment sales revenue on festive promotions. Strong demand for popular premium handsets was another strong growth driver.

Year-on-year hurt

A more telling insight into financial performance is of course year-on-year comparisons. And like many other operators wrestling with the fallout of COVID-19, SingTel shows some signs of bruising.

At S$4.34 billion ($3.28 billion), SingTel's Q3 operator revenue – which excludes NBN migration revenues - was down 3.2% compared with the same quarter the previous year. Underlying profits were hit again too, year-on-year, although not as much as the previous quarter.

EBITDA slipped by 13.5%, to a shade over S$1 billion ($0.75 billion), while EBIT tanked by 38.3% to S$328 million ($248 million), reflecting higher depreciation and amortization charges on network investments. Again, both these numbers exclude NBN migration revenues.

"We continue to feel the effects of the pandemic with roaming and prepaid revenues affected by travel restrictions," remarked the CEO, somewhat understatedly.

Always look on the bright side

Yuen Kuan Moon nonetheless seemed determined to cut an optimistic figure. "While the outlook is still uncertain we are well positioned for the new normal," he enthused, "especially with the Group's 5G rollout, the scaling of NCS and our digital bank joint venture in Singapore."

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He also flagged what he saw as a "gradual resumption of economic activities" in Singapore and Australia.

Another plus was the resilience shown at the "group enterprise" business segment, where operating revenue fell a comparatively modest 1.3% year-on-year S$1.52 billion ($1.15 billion).

"Strong ICT revenue growth of 7.9%," noted SingTel, "mitigated the decline in the legacy carriage business."

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— Ken Wieland, contributing editor, special to Light Reading