Singtel Q1 profit falls 72% to $818m as Airtel, Intouch-Gulf gains drop out

Singapore business continued to face intense price competition.

Singtel’s net profit fell 72% to $818m in the quarter, mainly due to the absence of $2.20b in exceptional gains from the partial sale of Airtel and the Intouch-Gulf Energy merger recorded a year earlier.

Underlying net profit, from which core dividends are paid, rose 21% to $831m, driven by growth at Airtel, AIS, NCS, Optus and Digital InfraCo.

Operating revenue, EBITDA and OpCo EBIT increased 4.9%, 8.7% and 10%, respectively, driven by stronger performances from NCS, Optus and Digital InfraCo, as well as a stronger Australian dollar. This was partly offset by weaker performance from Singtel Singapore.

Singtel Singapore’s operating revenue declined 3.1% amidst continued intense price competition. Growth in Data and Internet was offset by declines in Mobile, ICT and legacy services.

Mobile service revenue fell 4% on lower average revenue per user, although roaming revenue increased on improved wholesale volumes. EBITDA declined 4.6%, whilst EBIT fell 2.2%.

Digital InfraCo’s revenue increased 19%, driven by higher contributions from Nxera following the opening of DC Tuas and growth in RE’s AI cloud services.

Group CEO Yuen Kuan Moon said operating company EBIT was above guidance despite macroeconomic and geopolitical uncertainty. He said Singtel Singapore continued to face pricing pressure but is pursuing its tri-brand strategy across Singtel, Gomo and Hi!.

“We are beginning to reap contributions from our new growth investments in Digital InfraCo with our data centre arm Nxera seeing good growth in contracted capacity in Singapore and the region from strong customer demand for AI and cloud,” added Moon

Singtel’s AI cloud service RE is also expected to scale as demand for sovereign AI grows among governments and businesses.

“We will continue to execute with discipline and create long-term value for our shareholders through prudent, proactive capital management and our proven asset recycling strategy,” the chief executive said.

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