Singapore Telecommunications Limited’s Latest Earnings: An Overview Of The Group Digital Life Business

Singapore Telecommunications Limited (SGX: Z74) is Singapore’s largest operational telco, and it currently has three business segments: Group Consumer, Group Enterprise, and Group Digital Life.

In mid-August, Singtel reported its first quarter results for its fiscal year ending 31 March 2018 (FY2018). The reporting quarter was from 1 April 2017 to 30 June 2017. Since Singtel has three different business segments, I thought it would be useful to have a look at the performance of the individual segments.

In previous articles, I had discussed the results of the Group Consumer and Group Enterprise segments. They are found here and here.

In this article, I want to look at the Group Digital Life business. As a quick introduction, the segment mainly consists of three businesses: Digital marketing (Amobee), regional over-the-top video service (HOOQ), and advanced analytics and intelligence services (DataSpark). The segment also serves as Singtel’s digital innovation engine.

The overall result

The table below shows the operating revenue, EBITDA (earnings before interest, taxes, depreciation, and amortisation), and EBIT for the Group Digital Life segment in the first quarters of FY2018 and FY2017:

Source: Singtel FY2018 first quarter earnings announcement

There are a few notable observations from the table.

First of all, operating revenue (net of intercompany eliminations) more than doubled on a year-on-year basis. This was driven mainly by the acquisition of Turn to complement Amobee.

Secondly, EBITDA for the segment remained in negative territory. Yet, the EBITDA loss had narrowed by 34.2% as Amobee (including Turn) achieved EBITDA-breakeven on improved synergies and cost management. The improvement at Amobee was partly offset by higher investments in content and increased operating costs in HOOQ as it ramped up its businesses.

Lastly, there were a few notable achievements from the Group Digital Life segment in the reporting quarter. These include partnerships with Kia and Spotify for various digital marketing activities; Amobee’s win of a number of awards for recognition of its excellence in digital marketing; and the introduction of original productions by HOOQ, such as Critical Eleven, Marlina the Murderer in Four Acts, and Sweet 20 in Indonesia, and The T Party in the Philippines.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.