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Singapore Telecommunications Limited’s Latest Full Year Earnings Update: What Happened With Its 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-May, Singtel announced its full year earnings update for its financial year ended 31 March 2018 (FY2018). 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 businesses. In this article, I want to share three important things investors may want to know about the Group Digital Life segment’s latest earnings update.

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

Source: FY2018 earnings update

There are two notable observations from the table.

1. First of all, operating revenue for the year (net of intercompany eliminations) more than doubled. This was driven mainly by new contributions from Turn (acquired in April 2017), and a strong performance from Amobee’s media and social businesses.

2. Secondly, the Group Digital Life segment’s EBITDA for FY2018 remained in negative territory. But, the loss narrowed as Amobee showed improvement in its scale and synergy, especially following the acquisition of Turn.

In other news related to the Group Digital Life segment, HOOQ launched two original TV series in collaboration with Sony Pictures (The Oath and Carter) during the fourth quarter of FY2018. It also launched a local original film in the Philippines, Kita Kita, which netted over US$6 million during its theatrical run, making it the number one independent film in terms of gross box office receipts in the country.

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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.