Month: July 2008
SFI – BT
SFI’s Q2 profit up 29% on strong UK, local showing
SINGAPORE Food Industries (SFI) has reported a 29 per cent rise in net profit to $5.4 million for its second quarter ended June 30, as its Singapore and UK businesses performed strongly.
Revenue grew 4.7 per cent year on year to $166.3 million, with earnings per share rising to one cent from 0.8 of a cent.
Net profit for the half-year ended June was $18.2 million, up 29.5 per cent as revenue grew 3.4 per cent to $342.7 million.
The group has declared an interim dividend of 1.8 cents per share. It said that the interim dividend, previously declared in Q3, has been brought forward to Q2. SFI shares last closed at 78.5 cents.
CEO Roger Yeo said ‘both the Singapore and UK operations continued to improve their underlying business performance in Q2, with strong profit growth’.
All business segments in Singapore reported strong sales growth in Q2. As a result, H1 sales in Singapore grew 17.5 per cent.
Improved performance in UK/Ireland operations was led by steady sales growth in the Daniels business, up 10.5 per cent in pound sterling terms. Overall UK/Ireland sales, after removing the impact of weaker sterling against the Singapore dollar, increased 4.7 per cent.
But when reported in Sing dollars, overall sales in UK/Ireland decreased 4.9 per cent.
‘Overall, the outlook for FY 2008 continues to be for growth in earnings over FY 2007,’ SFI said.
M1 – BT
M1 posts 1.2% rise in Q2 profit, adds 57,000 customers
Mobile number portability ‘not as bad as it might have been’, says CEO
MOBILEONE (M1) yesterday reported a slim 1.2 per cent increase in second-quarter net profit to $41.1 million, as it struggled with higher customer costs in a competitive market.
M1, Singapore’s third-ranked telco, is the first of the trio to report results since the introduction of full mobile number portability. StarHub reports on Aug 6 and SingTel on Aug 12.
M1 chief executive Neil Montefiore said portability was a ‘peaceful event’ and not as bad as it might have been. ‘There were nowhere near the problems we saw in markets like Hong Kong,’ he said. M1 is ‘looking at a few thousand customers in July who want to take their numbers with them’.
Earlier this month, the Infocomm Development Authority said about 6,500 mobile subscribers have jumped ship since June 13 when full portability took effect. These ‘switchers’ amount to less than 0.1 per cent of the holders of the country’s six million mobile lines.
The three telcos unleashed fierce marketing tactics ahead of June 13 to hang on to customers. In Q2 ended June 30, M1’s advertising and promotion expenses rose 51.3 per cent quarter on quarter to $5.9 million.
Mr Montefiore said the telco has seen a reduction in acquisition and retention costs in the ‘past week or so’.
M1 has announced an interim dividend of 6.2 cents. In the same period last year, it paid 7.10 cents, consisting of an interim dividend of 2.5 cents plus 4.6 cents via a capital reduction. Q2 earnings per share were 4.6 cents, up 7 per cent.
For the six months ended June, net profit was $79.1 million, down 12.4 per cent from a year earlier, when the result was swelled by a tax adjustment. In Q2, the company added 57,000 customers, giving it a base of 1.6 million. But its market share continued to slip, to 26 per cent from 28.4 per cent a year ago.
Mr Montefiore said the telco is not focused on market share but customer and revenue growth. Q2 operating revenue increased 2.8 per cent to $205.3 million.
All Q2 revenue streams registered growth, except for handset sales which fell 29.8 per cent to $13.9 million due to lower selling prices. International call services was the best performer, up 22.2 per cent to $38 million.
Free cash flow almost doubled to $105.6 million for the first half, mainly due to higher tax a year ago.
On prospects for the rest of the year, M1 said it expects competitive activity to settle down in a quarter or two. It also expects operations to remain stable for the year.
M1 shares closed two cents lower yesterday at $1.92.
SingTel – DBS
Strong Bharti earnings neutralized by exchange rate
Story: Bharti delivered strong earnings growth of 34% y-oy compared to our expectations of 30% growth. However, Indian rupee has weakened about 15% Y-o-Y with respect to Singapore dollar compared to our estimate of 10%. As such in Singapore dollar terms, Bharti’s earnings are inline with our forecasts.
Point: The main surprise in Bharti’s results came from stronger than expected top line growth of 44% Y-o-Y compared to our expectations of 32% growth. This was due to (a) strong subscriber addition of 2.5m per month compared to our estimate of 2.2m subscribers per month
and (b) Lower than expected ARPU decline of 2% Q-o-Q compared to our estimate of 3% decline.
Relevance: Local currencies of Thailand, Indonesia, and Philippines have declined about 14%, 10% and 4% Y-o-Y with respect to Singapore dollar till date. Since regional associates account for more than half of the total group earnings, we believe that SingTel’s earnings growth would
be limited to mid-single digit in the upcoming set of 1QFY09 results on 12th Aug 08. We maintain HOLD for SingTel with our SOTP based target price of S$3.75.
M1 – DBS
Another tough quarter ahead
Comments
Net- profit of S$41.1m was up 1.2% y-o-y mainly due to one time write back of S$6m provisions for leased circuit costs otherwise earnings would have declined y-o-y. Revenue at S$205.3m was up 3.8% mainly due to strong 22% growth in revenue from international call services. EBITDA margin at 43.6% were lower than 45.5% last year but inline with our expectations. The company declared 6.2 cents in dividends as expected.
Slight loss of market share while ARPU held up pretty well. Although M1 added 43K and 14K subscribers across pre-paid and post-paid segments respectively, market share was lower at 23.9% (24.7% in 1Q08) and 28.0% (Vs 28.1%) respectively. Post-paid ARPU was fairly stable while pre-paid ARPU was down at S$16.5 (S$17.5 in 1Q08) due to stiff price competition.
Recommendation
We think MNP pain would be felt for one more quarter. M1 would have reported declining earnings for 2Q08 Y-o-Y if not for S$6m write back. While MNP kick started on 13 June 08, M1’s monthly churn rate has gone up to 1.5% from 1.3% in 1Q08. Subscriber acquisition and retention costs have also gone up subsequently. We expect the full impact of MNP to be visible in 3Q08 numbers. We maintain HOLD with DCF based target price of S$2.20. Regular dividend yield of over 7.3% can be further complemented by special dividends or capital reduction as M1’s net debt-to-EBITDA at 0.6x remains far below its target of 1.5x
M1 – BT
SINGAPORE – MobileOne (M1) said on Thursday that its net profit for Q208 increased 1.2 per cent to $41.1 million (US$30.2 million) as Singapore’s third ranked telco struggled with higher customer costs in a competitive market.
But M1 did not disappoint shareholders and announced a higher interim dividend of 6.2 cents from 2.5 cents a year ago.
Earnings per share was 4.6 cents, up 7 per cent.
For the six months ended June 30 2008, net profit decreased 12.4 per cent to $79.1 million, as the previous corresponding period gained from a tax adjustment.
The company’s operations in Q208 remained stable, consistent with the prospect statement made, it said.
On prospects for the rest of the year, M1 said full mobile number portability was introduced on June 13, 2008 and during the quarter, the mobile market saw an increase in competitive activities, and as expected, M1 saw increases in both its acquisition and retention costs.
This level of competitive activities is likely to settle down in a quarter or two, it said. — SIOW LI SEN, BT NEWSROOM