SINGAPORE (July 18): M1 posts a 20.8% decline in net profit to S$32.5 million for the second quarter ended June, from S$41.0 million in the corresponding quarter last year.
EBITDA in 2Q fell 10.7% to S$73.4 million, from S$82.2 million a year ago.
Operating revenue grew 4.7% to S$251.6 million, from S$240.4 million a year ago. Compared to 1Q17, operating revenue was 3.5% lower q-o-q.
This increase in 2Q was mainly due to a 28.8% increase in handset sales to S$46.9 million, compared to S$36.4 million a year ago.
Meanwhile, total service revenue held steady, edging up by 0.4% to S$204.7 million.
This was largely due to a 21.9% increase in revenue from fixed services to S$31.1 million, offset by a 2.1% decline in mobile telecommunications services revenue to S$159.5 million and a 8.6% drop in international call services revenue to S$14.0 million.
However, the increase in revenue was outpaced by operating expenses, which increased by 9.9% to S$210.1 million in 2Q. This was mainly attributable to a S$15.4 million increase in cost of sales on the back of higher handset costs and wholesale costs of fixed services.
Cash and cash equivalents stood at S$6.1 million as at June 30, 2017.
As at June 30, 2017, M1’s capital commitment is at S$238.9 million, including S$188.0 million for the 700MHz spectrum.
M1 has declared an interim dividend of 5.2 Singapore cents per share for the half-year period. This is 25.7% lower than the interim dividend of 7.0 Singapore cents per share paid a year ago.
The dividend will be paid on Aug 8, 2017.
Looking ahead, M1 says it is “well positioned” to capture new opportunities in the digital economy.
“We have been investing in NB-IoT network and digital solutions, and expanded our offerings to include managed infrastructure services, cyber security, business solutions and analytics. This would enable us to better serve our customers and generate new revenue streams for future growth,” says M1 CEO Karen Kooi.
However, the group says in a filing to SGX that it expects to post a decline in net profit after tax for the year 2017.
Shares of M1 closed 3 Singapore cents higher at S$2.10 on Tuesday.