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The Positives And Negatives That Investors Should Know About M1 Ltd’s Latest Results

M1 Ltd (SGX: B2F) is the smallest player within Singapore’s telecommunications industry. M1’s business has four segments, namely, mobile services, fixed services, international call services, and handset sales. The company recently released its 2018 third quarter earnings update. In this article, I will look at the good and not-so-good points from its results announcement.

The positives

Firstly, M1’s revenue improved by 10.1 % year-on-year to S$274.6 million. Service revenue also inched up by 1.9% year-on-year to S$190.2 million.

Secondly, M1’s balance sheet improved. As of 30 September 2018, the telco’s net debt stood at S$363.5 million and its gearing ratio (net debt over equity) was 0.7; a year ago, M1’s net debt and gearing were S$397.9 million and 1.0, respectively.

Thirdly, the number of postpaid mobile subscribers for M1 increased by 7.1% year-on-year to 1.36 million. Similarly, fibre customer numbers jumped by 12.3% year-on-year to 204,000.

Last but not least, the average revenue per user (ARPU) for M1’s fibre broadband business increased by 4.3% to S$38.60 compared to a year ago.

The negatives

Firstly, the mobile telecommunication and international call segments reported year-on-year declines in revenue of 0.1% and 29.4%, respectively.

Secondly, prepaid mobile subscriber numbers fell by 20.7% to 584,000. This resulted in a decline in the segment’s market share from 22.3% a year ago to 19.8%.

Thirdly, ARPUs for postpaid, prepaid, and data plan were down by 2.6%, 2.8% and 16.5%, respectively, compared to 2017’s third quarter.

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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.