Home Business Telecommunications Optus profits decline for previous quarter
Optus profits decline for previous quarter Featured

Australia's second largest telco Optus suffered a drop in profits for the quarter ending 30 June despite increasing revenue and subscriber numbers. The company's latest financial report for the quarter to the end of June this year revealed net profits for the three months dropped by 3.5% to $154 million from $160 million for the corresponding period in 2017.

Optus mobile service revenue rose 2% to $963 million, underpinned by customer growth from an additional 66,000 new services across Optus consumer and enterprise businesses – and mobile revenue, including equipment sales, rose strongly by 8%.

And Optus also reported that EBITDA increased 2% to $656 million, while net profits after tax declined slightly to $154 million, mainly due to lower NBN migration revenue.

Excluding NBN migration revenues, EBITDA and NPAT increased 5% and 10% respectively, while free cash flow for the quarter was up 8% to $130 million.  

Optus chief executive Allen Lew said that during the quarter the telco had leveraged its investments in networks, technology and content to create “sustainable competitive advantages and positive customer growth”.

“Football continues to be a key pillar of our content strategy and we remain focused on being the home of elite international football in Australia,” he said.  

optus results

In other results for the quarter, Optus reported that blended mobile and post-paid handset average revenue per users declined 2% and 3% respectively, which it says was due to the impact of the increasing mix of SIM-only plans and data price competition.   

Optus also revealed that mass market fixed, operating revenues decreased 1% due to what it says was the temporary suspension of NBN HFC connections.

The telco says that excluding NBN migration revenues, mass market fixed revenue grew 5% on an enlarged base of 483,000 NBN broadband customers – an increase of 204,000 and 30,000 for the year and quarter respectively.

Optus notes in its report that it has extended exclusive Australian rights to the Premier League for a further three seasons to 2022 and announced exclusive rights for an “enormous range” of European International football until 2022, including Euro 2020 and qualifiers, and UEFA’s Champions League, Nations League, Europa League, Super Cup; and 2022 World Cup Qualifiers.  

And, the telco says that during the quarter, it delivered a state-of-the-art 5G technology showcase at the 2018 Gold Coast Commonwealth Games and also launched the Optus Innovation Hub in Sydney which connects SMBs and start-up businesses with new technology.

In another reference to its performance, Optus says it was also recognised as the most digitised of the leading ANZ telecommunications providers.

“With our leadership in network and technology capability, our plans are well advanced for the implementation of 5G in early 2019,” Lew said.

Optus says its 4G network covers 96.9% of Australian population and that customer satisfaction continues to improve – with the consumer Net Promoter Score rising to +12 in the quarter.

Meanwhile, in its financial report, Optus' parent company Singtel said the first quarter results were "resilient despite keen competition".  

Singtel highlights the fact that Australia performed strongly, registering higher customer growth across both the consumer and enterprise segments, while mobile data remained a key growth driver.

The Singapore-based telco reported that operating revenue was up 2% and EBITDA was stable in constant currency terms.

It also revealed that underlying net profit fell 19% due to weaker results from Airtel and Telkomsel, reduced economic interest in NetLink NBN Trust1, an increase in withholding taxes from higher dividends and adverse currency movements and net profit declined 7% to S$832 million and would have been down 4% in constant currency terms.

“This quarter’s results reflect the resilience of our core business against intense competition and increasing business headwinds," said Chua Sock Koong, Singtel Group chief executive.

"The Group continued to record data growth and Optus made gains in both the consumer and enterprise markets, bolstered by our quality networks, differentiated content and comprehensive ICT capabilities. Our overall focus on digitisation and automation has also improved customer engagement and delivered productivity gains and cost savings.”

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

 

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