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Singapore Telecommunications Limited’s Latest Results: Key Highlights From Its Enterprise Business

Singapore Telecommunications Limited (SGX: Z74) or Singtel, is one of the three main telcos in Singapore. The group operates in three business segments, namely, Consumer, Enterprise and Digital Life.

Recently, Singtel released its 2019 first quarter (1Q FY19) earnings update. In this article, we will look at the main highlights from the Enterprise business.

Overall results

Source: Singtel’s Management Discussion And Analysis

Overall, revenue was down 3.2% year-on-year mainly due to completion of a large infrastructure project last year and continued declines in traditional legacy services, especially voice. Similarly, EBIT (earnings before interest and tax) fell 10.4% due to lower revenue and stable operating expenses.

We will now explore the performance of Singtel’s Singapore and Australia businesses.

Singapore business

Source: Singtel’s Management Discussion And Analysis

Overall, revenue was down across the board except for Business Solutions and Sales of Equipment businesses.

The weaker performance in Managed Services was mainly due to completion of a major infrastructure project, as well as decline in Trustwave’s legacy payment card industry data security business, which is facing commoditisation. Also, Data and Internet revenue declined due to the slowdown in the maritime industry and price erosion, while Mobile service revenue fell as a result of lower international and roaming call usage.

Australia business

Source: Singtel’s Management Discussion And Analysis

Overall, Singtel’s Australia Enterprise business performed well with higher year-on-year revenue across most businesses other than Voice. ICT and Managed Services revenue was up due to higher cybersecurity, cloud and unified communications revenues.

EBITDA (earnings before interest tax depreciation and amortisation), however, declined 8.9% due to intensifying price competition and higher mix of lower-margin ICT services.

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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.