| Year Ended 31 December | |||
| 2016 S$’m |
2015 S$’m |
YoY Change |
|
| Operating revenue | |||
| Mobile telecommunications | 640.0 | 667.7 | -4.2% |
| International call services | 61.3 | 68.7 | -10.8% |
| Fixed services | 104.2 | 85.9 | 21.4% |
| Total service revenue | 805.5 | 822.3 | -2.0% |
| Handset sales | 255.4 | 334.9 | -23.7% |
| Total | 1,060.9 | 1,157.2 | -8.3% |
For 2016, operating revenue decreased 8.3% to S$1,060.9 million, mainly due to lower handset sales volume. Service revenue decreased 2.0% to S$805.5 million, due to lower international call services and roaming revenues.
| Year Ended 31 December | |||
| 2016 S$’m |
2015 S$’m |
YoY Change |
|
| Mobile telecommunications revenue | |||
| Postpaid | 569.7 | 590.8 | -3.6% |
| Prepaid | 70.3 | 76.9 | -8.6% |
| Total | 640.0 | 667.7 | -4.2% |
| Average revenue per user (ARPU, S$ per month) | |||
| Postpaid (excludes Data Plan) | S$58.0 | S$61.7 | -6.0% |
| Postpaid (excludes Data Plan and adjusted)1 | S$50.3 | S$54.2 | -7.2% |
| Data plan | S$14.8 | S$17.1 | -13.5% |
| Prepaid | S$12.2 | S$14.7 | -17.0% |
| Fibre broadband | S$45.1 | S$46.7 | -3.4% |
| Mobile data as a % of service revenue | 54.0% | 46.3% | |
| 1 | After adjustment for ARPU allocated to handset sales |
Mobile telecommunications revenue decreased 4.2% to S$640.0 million. Segmentally, postpaid revenue decreased 3.6% to S$569.7 million due to lower voice and roaming revenues. Prepaid revenue at S$70.3 million was 8.6% lower year-on-year due to lower voice traffic.
Mobile data revenue continued to grow with average smartphone data usage increasing to 3.6GB per month in the fourth quarter of 2016 from 3.3GB per month a year ago. Accordingly, mobile data revenue increased 7.7 percentage points year-on-year to 54.0% of service revenue.
| Year Ended 31 December | |||
| 2016 S$’m |
2015 S$’m |
YoY Change |
|
| International call services revenue | |||
| Retail revenue | 42.5 | 53.0 | -19.7% |
| Wholesale and bilateral revenue | 18.8 | 15.8 | 19.2% |
| Total | 61.3 | 68.7 | -10.8% |
| Total international retail minutes (in millions) | 696 | 813 | -14.3% |
International retail minutes decreased 14.3% to 696 million minutes, mainly due to decline in usage to low value destinations. Accordingly, international call services revenue decreased 10.8% to S$61.3 million.
Handset sales decreased 23.7% to S$255.4 million as a result of lower sales volume and selling price.
| Year Ended 31 December | |||
| 2016 S$’m |
2015 S$’m |
YoY Change |
|
| Cost of sales | 461.5 | 530.8 | -13.1% |
| Staff costs | 115.0 | 118.2 | -2.7% |
| Advertising and promotion expenses | 22.1 | 24.3 | -9.0% |
| Depreciation and amortisation | 126.8 | 118.4 | 7.0% |
| Allowance for doubtful debts | 8.4 | 8.9 | -6.1% |
| Facilities expenses | 86.4 | 82.1 | 5.3% |
| Leased circuit costs | 31.5 | 31.7 | -0.6% |
| Other general and administrative expenses | 29.3 | 25.6 | 14.3% |
| Total | 880.9 | 940.0 | -6.3% |
Operating expenses decreased 6.3% to S$880.9 million, mainly due to lower cost of sales.
| Year Ended 31 December | |||
| 2016 S$’m |
2015 S$’m |
YoY Change |
|
| Handset costs | 343.9 | 419.1 | -17.9% |
| Traffic expenses | 39.2 | 39.4 | -0.5% |
| Wholesale costs of fixed services | 45.1 | 38.4 | 17.5% |
| Other costs | 33.3 | 34.0 | -2.0% |
| Total | 461.5 | 530.8 | -13.1% |
Cost of sales decreased 13.1% to S$461.5 million, driven mainly by lower handset costs. Handset costs decreased 17.9% to S$343.9 million due to lower sales volume and average unit cost. Wholesale costs of fixed services increased 17.5% to S$45.1 million as a result of a larger base of fibre customers.
Staff costs decreased 2.7% to S$115.0 million, due to lower variable performance-based incentive.
Advertising and promotion expenses decreased 9.0% to S$22.1 million, due to lower marketing activities.
Depreciation and amortisation expenses increased 7.0% to S$126.8 million as a result of higher fixed asset base.
Allowance for doubtful debts decreased 6.1% to S$8.4 million, due to improved collection.
Facilities expenses increased 5.3% to S$86.4 million, driven mainly by higher network maintenance expenses.
Leased circuit costs at S$31.5 million was stable year-on-year.
Other general and administrative expenses increased 14.3% to S$29.3 million, mainly due to higher licence fees provisions.
Finance costs increased 37.2% to S$6.7 million, due to higher borrowings and interest rate.
Provision for taxation decreased 27.7% to S$28.9 million, due to lower profit before tax and overprovision in prior year.
| Year Ended 31 December | |||
| 2016 S$’m |
2015 S$’m |
YoY Change |
|
| Net profit after tax | 149.7 | 178.5 | -16.1% |
| Net profit after tax margin (on service revenue) | 18.6% | 21.7% | |
Net profit after tax at S$149.7 million was 16.1% lower and net profit after tax margin declined to 18.6% of service revenue.
| Year Ended 31 December | |||
| 2016 S$’m |
2015 S$’m |
YoY Change |
|
| EBITDA | 312.1 | 341.8 | -8.7% |
| EBITDA margin (on service revenue) | 38.7% | 41.6% | |
EBITDA decreased 8.7% to S$312.1 million.
EBITDA margin as a percentage of service revenue, was lower at 38.7%.
Capital expenditure incurred for 2016 increased by S$7.0 million to S$140.5 million, mainly due to expansion of fibre infrastructure.
Capital commitment as at 31 December 2016 was S$40.5 million.
| Year Ended 31 December | |||
| 2016 S$’m |
2015 S$’m |
YoY Change |
|
| Profit before tax | 178.6 | 218.4 | -18.2% |
| Non-cash item and net interest expense adjustments | 95.0 | 80.8 | 17.6% |
| Net change in working capital | 61.3 | (60.1) | -202.0% |
| Net cash provided by operating activities | 334.9 | 239.1 | 40.0% |
| Net cash used in investing activities | (220.2) | (141.8) | -55.2% |
| Net cash used in financing activities | (113.7) | (110.1) | -3.2% |
| Net change in cash and cash equivalents | 1.0 | (12.8) | 108.1% |
| Cash and cash equivalents at beginning of financial year | 10.0 | 22.8 | -56.2% |
| Cash and cash equivalents at end of financial year | 11.0 | 10.0 | 10.5% |
| Free cash flow 1 | 129.6 | 105.7 | 22.6% |
| 1 | Free cash flow refers to net cash provided by operating activities less current year capital expenditure and payment for spectrum rights. |
Operating cash flow increased 40.0% to S$334.9 million. Accordingly, free cash flow was 22.6% higher at S$129.6 million.
As at 31 December 2016, gearing ratio was 1.0 time compared to 0.8 times as at 31 December 2015. Interest coverage ratio (EBITDA/Interest) was 46.2 times for 2016 compared to 69.5 times for 2015.
