Optus’ enterprise arm drags down Singtel profit
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The news: Optus’ parent Singtel has reported a net profit drop of 64% to S$795 million ($889 million) for FY24, mostly due to non-cash impairment charges on goodwill and Optus’ enterprise business
The numbers: During the six months to 31 March, Optus’ wholesale, fleet and enterprise fixed revenue fell 16%. Optus said this was largely due to a decline in the fixed carriage component of the enterprise business driven by price erosion and churn. It noted that wholesale revenue also decreased as a result of lower satellite equipment sales and a strategic exit from NBN.
Optus also posted an operating revenue loss of 1.1% to $4.1 billion for the half-year, which the telco also said was due to weakness in its enterprise business. Over the full year it was flat at 0.1% to $8.06 billion.
Its EBITDA for the half year was up 4.8% to $1.07 billion and up 0.7% to $2.1 billion for the full year.
The context: Optus said despite the challenges of its network outage in November 2023, momentum returned in the fourth quarter, with overall mobile and home revenue each growing by 2% for the full year.
While its revenue was down on weakness in its enterprise business, this was partially offset by higher mobile service revenue due to strong prepaid customer growth and higher postpaid average revenue per user.
Singtel noted that Optus’ EBIT (up 20% to $147 million for the half year) was stable as pressures from eroding fixed enterprise margins and higher content and energy costs were mitigated by cost optimisation efforts.
What they said: Interim CEO and CFO Michael Venter said: “Optus is working hard to rebuild the trust of customers after a challenging 18 months and these results demonstrate we are on the right track”.
“We’re listening to our customers and in the year ahead we’ll be continuing to prioritise what we know is important to them – a resilient network that delivers seamless connectivity, great value products and services, and simple, efficient customer service,” he said.
The sources: Singtel media release, Optus media release
