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M1 Ltd’s Latest Earnings Update: Higher Revenue But Lower Profits

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

With that out of the way, let’s will look at 10 things from M1’s earnings that we think are important:

  1. Revenue was up 10.1 % year-on-year to S$274.6 million. Service revenue was up 1.9% year-on-year to S$190.2 million.
  2. EBITDA (earnings before interest tax depreciation and amortisation) for the quarter declined 3.6% year-on-year to S$77.2 million.
  3. Service revenue margin was down from 42.9% a year ago to 40.6% in its latest quarter.
  4. Net profit was down 5.3% year-on-year to S$34.4 million.
  5. Free cash flow came in at S$73 million, down 8.7% as compared to the same period last year.
  6. As of 30 September 2018, net debt stood at S$363.5 million with gearing at 0.7 times. A year ago, net debt and gearing were S$397.9 million and 0.9 times, respectively.
  7. For the quarter, revenue for M1’s fixed segment and handset sales segments were up by 25.9% and 34.1%, respectively, compared to the same period last year. On the other side, revenue for the international call segment and mobile service were down by 29.4% and 0.1%, respectively, compared to last year.
  8. Total mobile customer count was down 3.1% year-on-year to 1.946 million whilst the number of fibre customers was up 3% year-on-year to 204,000.
  9. M1’s overall mobile market share stood at 23.5% as of July 2018. M1 reported lower prepaid customers, which was offset by higher postpaid customers.
  10. Keppel Corporation Limited (SGX: BN4), together with Singapore Press Holdings Limited (SGX: T39) offered S$2.06 to take-over M1. The deal is subject to approvals from the Info-communications Media Development Authority (IMDA).

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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.