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Singapore Telecommunications Limited’s Latest Quarterly Result: Key Highlights From its Digital Life Business

Singapore Telecommunications Limited (SGX: Z74) or Singtel, is the biggest among the three telcos in Singapore. The other two are M1 Ltd (SGX: B2F) and StarHub Ltd (SGX: CC3). The group has three business segments, namely consumer, enterprise and digital life.

Recently, the company has reported its second-quarter earnings for the financial year ending 31 March 2018 (FY2018). In this article, we will look at the key highlights from the digital life business segment.

As a brief introduction, Singtel’s digital life business consists of three segments: digital marketing (Amobee), regional premium OTT video (HOOQ), and advanced analytics and intelligence capabilities (DataSpark). Singtel also has a corporate venture capital fund called Innov8.

A bird’s eye view of the digital life business segment

Source: Singtel’s FY18 second-quarter management discussion and analysis

For context, Singtel generated a total sales of S$4.3 billion for FY18’s second-quarter.

Digital life’s operating revenue (net of inter-company eliminations) more than doubled on a year-on-year basis. This growth was driven by the acquisition of Turn, and growth at Amobee.

Unfortunately, EBITDA (earnings before interest, tax, depreciation, and amortization) remained in negative territory. Yet, the segment’s loss narrowed as Amobee (including Turn) turned EBITDA positive on improved scale and synergy, boosting by the Turn acquisition.

Amobee’s improvement was partly offset by higher investments in content, and increased operating costs in HOOQ which is ramping up.

For further insight, Amobee reported that it achieved new customer wins during the quarter including Burberry, World Vision and Suzuki in Australia, together with Williams-Sonoma and Honda in North America. Amobee also scored wins with KraftHeinz, Airbnb and the NBA.

A Foolish takeaway

In summary, Singtel managed to grow its digital life segment revenue. The business is still in negative EBITDA territory for the quarter, albeit with a smaller loss compared to a year ago.

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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.