M1 Reports First Quarter Results

M1Telecommunications provider M1 (SGX: B2F) reported its first quarter results today. The company saw a 7.4% decline in quarterly revenue from S$262.5m a year ago to S$243m. But, profit increased by 1.8% year-on-year from S$40.3m to S$41m, while earnings per share only inched up by 1.1% from S$0.04 to S$0.045.

M1 grew its post-paid mobile customer base from 1.05m customers a year ago to 1.107m. It was the fourth consecutive quarterly increase in customer base numbers since the first quarter of 2012. Elsewhere, its quarterly pre-paid mobile customer base numbers did not fare so well, dropping 2.3% to 938,000 from last year.

The dynamics between the post-paid and pre-paid customer base numbers resulted in M1 increasing its quarterly overall mobile market share from 25.9% in the first quarter of 2012 to 26.1% on Jan 2013. The company’s mobile market share had stabilised at 26.1% since the third quarter last year.

The company now has 223,000 4G-network customers among its mobile customer base and have extended its 4G service to pre-paid customers.

A particular bright spark to note would be M1’s growth in Fibre customers. The current quarter saw 107% year-on-year growth to 60,000 customers. It was also an increase of 8000 from the last quarter. M1’s Fixed services segment, which Fibre belongs to, is the fastest growing business segment in the company – quarterly revenues had grown by 21.2% from S$11.8m a year ago to S$14.3m.

The company is looking to grow its Fibre segment for the rest of 2013, citing ‘increased awareness and fibre coverage’ and ‘low fibre penetration”. M1also expects moderate growth in full year after-tax profit for 2013 from last year’s S$146.5m.

M1’s Chief Executive Officer, Ms Karen Kooi, had this to comment on the company’s first quarter and future results: “The faster 4G network and devices will continue to drive data usage. The extension of 4G service to the prepaid segment and availability of lower-cost 4G devices are likely to spur take-up of 4G service”.

Shares of M1 closed at $3 on Tuesday and are selling for 18.6 times earnings with a dividend yield of 4.9%.

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