Singtel(SGAPY) - 2020 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Group revenue rose by 2% in constant currency terms, driven by growth in equipment sales, digital services, and higher NBN migration revenue [4] - Free cash flow declined by 17% due to lower associates' dividends and higher capital expenditure [8] - Net debt increased to SGD 11.8 billion from a year ago, influenced by the subscription of Airtel's rights shares and the inclusion of approximately SGD 2.3 billion worth of lease liabilities under new accounting standards [8] Business Line Data and Key Metrics Changes - Trustwave and Amobee delivered strong revenue growth, contributing positively to the group's growth engines [3] - Group Enterprise revenue declined by 5% due to continued pressure in carriage, with a stable performance excluding Optus business [12] - Group Digital Life revenue rose by 17% driven by growth in Amobee's programmatic platform business and the acquisition of Videology [12] Market Data and Key Metrics Changes - Contributions from Telkomsel rose by 18% due to robust data and digital growth [5] - The Indian mobile market experienced pricing stability, while the Indonesian market saw strong earnings growth for Telkomsel [4][10] - The weaker Australian dollar impacted the group's revenue and EBITDA, but foreign currency movements had minimal impact on underlying net profit [5] Company Strategy and Development Direction - The company continues to invest in network, content, and technology to create competitive advantages and extend market leadership in telecom and ICT services [2] - Expansion of VIA, the mobile payment alliance, aims to grow its addressable market from 26 million to 50 million wallets and over 2 million merchants [3] - New services and conveniences are being introduced to enrich customer lifestyles and create new revenue streams, such as the use of Dash for payments at hawker centers [6] Management's Comments on Operating Environment and Future Outlook - Management noted intense competition in Singapore and Australia, particularly in the Enterprise segment, and cautious business sentiment affecting performance [4] - The outlook for the financial year ending March 2020 has been affirmed, with updated guidance for EBITDA and free cash flow reflecting changes in lease accounting standards [13] Other Important Information - The company invested SGD 274 million to enhance its mobile network, including Optus' 5G fixed wireless rollout [2] - Amobee has developed a unified advertising platform for TV, social, and digital, which is expected to accelerate growth in programmatic advertising [8] - HOOQ revenue increased strongly due to growth from a higher-paying subscriber base in Southeast Asia and India [13] Q&A Session Summary Question: What are the impacts of the new accounting standards on financial results? - The financial impact on the group's net income is not material, with lower operating expenses offsetting increases in depreciation and finance expense [1]