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 early August, Singtel announced its first quarter earnings update for its financial year ending 31 March 2019 (FY2019). Since Singtel has three different business segments, I thought it would be useful to have a look at the performance of the individual segments.
Today, we will look at Singtel’s Group Digital Life business. The segment of three businesses – digital marketing (Amobee), regional premium OTT video (HOOQ) and advanced analytics and intelligence capabilities (DataSpark). The Group Digital Life also houses Innov8, Singtel’s venture capital fund.
With that in mind, here are three important things investors may want to know about the segment’s latest performance:
Source: Singtel’s Management Discussion And Analysis
There are a number things to highlight from the latest earnings update.
For one, operating revenue was down 7%. The decline was due to a weaker US dollar compared to the same period last year. In particular, Amobee’s revenue declined 3.1% in constant currency terms due to the timing of marketing spend by certain Amobee customers. The decline in Amobee’s revenue was partially offset by higher revenue from HOOQ which ramped up its business.
Despite the lower revenue, EBITDA (earnings before interest tax depreciation and amortization) remained flat as the business segment kept its operating expenses in check.
Finally, HOOQ launched its free-to-air LIVE TV offering to the Indonesian market. With this, mobile users across iOS and Android can access their favourite local TV shows from nine free-to-air streaming channels on the HOOQ application or through their mobile web browsers.
SingTel’s digital life business remained in red in this quarter. As it stands, the business segment will likely remain in red until the company can achieve sufficient scale for its Group Digital Life business.
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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.