10 Quick Things That Investors Should Know About M1 Ltd’s Latest Results

Last week, M1 Ltd (SGX: B2F)  released its 2018 second-quarter (Q2 FY18) earnings. As a quick introduction, M1 is the smallest player within Singapore’s telecommunications industry, sitting behind Starhub Ltd (SGX: CC3) and leader, Singapore Telecommunications Limited (SGX: Z74).

Here, let’s look at 10 things about the earnings presentation that I think are important to note:

1. Revenue for the quarter was up 1.7% year-on-year to S$253.2 million. Service revenue was up 5.2% year-on-year to S$193.0 million.

2. Quarterly EBITDA (earnings before interest tax depreciation and amortisation) grew 1.4% year-on-year to S$78.4 million.

3. EBITDA margin for the quarter was down from 42.1% last year to 40.6%.

4. Net profit was up 1.5% year-on-year to S$36.2 million.

5. Free cash flow came in higher at S$42 million, up 222% as compared to the same period last year.

6. As of 30 June 2018, net debt stood at S$420.5 million and gearing stood at 0.9 times. A year ago, net debt and gearing were S$394.9 million and 0.8 times respectively.

7. For the quarter, revenue for Mobile and Fixed segments were up by 3.8% and 27.4%, respectively, as compared to the same period last year. On the other hand, revenue for International Call and Handset Sales were down by 27.3% and 8.0%, respectively, as compared to a year ago.

8. Total mobile customers number was down 3.9% year-on-year to 1.964 million while fibre customers number was up 13.4% year-on-year to 200,000.

9. M1’s overall mobile market share stood at 23.6%, down from 24.1% last year. This was mainly driven by lower prepaid customers.

10. M1 made the following comments on its outlook:

“M1 is committed to stay at the forefront of technology advancements and has embarked on early multi-vendor 5G trials, including Singapore’s first end-to-end 5G live trial in June 2018. This could provide insightful learning crucial to the successful development of relevant 5G services. With our foundation of dense cell grid and advanced narrow band Internet-of-Things network, we are well positioned to harness exciting new capabilities and support highly reliable and responsive applications on our network. …

For the full-year 2018, we estimate capital expenditure to be around S$120 million. Based on current outlook and barring any unforeseen circumstances, we estimate second half profits to be lower in view of market seasonality and impending new competition.”

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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.