M1's profit drops 16% on-year for FY2016

M1's profit drops 16% on-year for FY2016

The telco reported a 2 per cent drop in service revenue.

SINGAPORE: Local telco M1 has reported a 2 per cent drop its service revenue for the 2016 financial year, as traditional telecommunications services continued to be impacted by over-the-top (OTT) services.

In a media release on Tuesday (Jan 24), M1 said service revenue was S$805.5 million for the financial year ending Dec 31, 2016. Fixed services, however, continued to post strong growth, with revenue increasing 21.4 per cent to S$104.2 million. This accounted for 12.9 per cent of service revenue compared to 10.4 per cent a year ago.

M1 said the growth was driven by a larger base of residential, corporate and Government customers.

Meanwhile, net profit after tax declined 16.1 per cent year-on-year to S$149.7 million. M1 attributed the fall mainly to “lower international call and roaming revenues, as well as increased depreciation and amortisation expenses from higher fixed asset base in respect of 4G, additional spectrum acquired and new services”.

Over the year, M1 added 52,000 postpaid customers and 39,000 prepaid customers, bringing the total mobile customer base to 2.02 million. Mobile churn was stable at 1 per cent from a year ago. Data traffic continued to trend higher, with average postpaid smartphone data usage increasing to 3.6GB per month in the fourth quarter of 2016, from 3.3GB per month a year ago.

Mobile data revenue also increased 7.7 percentage points year-on-year to 54 per cent of service revenue. M1’s fibre customer base also increased 32,000 during the year to 160,000.

A final dividend of 5.9 cents per share was recommended by the Board of Directors, taking the full-year payout to a total of 12.9 cents per share, added M1.

Source: CNA/ek