For the 1Q20 ended June, Singapore Telecommunications (Singtel) reported a 24.2% y-o-y decline in its earnings before interest, taxes, depreciation, and amortization (EBITDA) to $897 million after including some $17 million of Jobs Support Scheme credits from the Singapore government.

The figures were released in the telco’s business update on August 17.

Operating revenue for the quarter slid 13.9% y-o-y to $3.54 billion, mainly due to “challenging market conditions” due to the Covid-19-induced shutdowns across Singapore and Australia.

The lower numbers were attributed to travel and movement restrictions, lower footfall in retail stores, and a general dampening in consumer and business spending amid the global economic slowdown. They were also attributed to the delay or deferment of some international and communications technology (ICT) products, which resulted in increased project costs and lower billings, as well as intense price competition across markets and declines in carriage revenues.

Segmentally, operating revenue for Singapore Consumer fell 21.6% y-o-y to $406 million due to the mandated circuit breaker measures in April and May. Mobile service revenue declined due to a sharp fall in roaming as well as lower prepaid usage, as users mainly relied on wifi as they stayed indoors. The numbers were affected by the declining tourist and foreign workers numbers due to border closures. Movement restrictions during the period also affected equipment sales. EBITDA for the segment fell 13.9% y-o-y to $162 million after the inclusion of the Jobs Support Scheme credits.

Operating revenue in the Australia Consumer segment fell 13.3% to $1.60 billion mainly from a decline in mobile revenues due to lower roaming, late payment fee waivers, and credits to frontline healthcare workers. The lower figures were also attributable to higher SIM-only customer mix and continuing data price competition. Due to the lower retail footfall, equipment sales also declined. EBITDA for the segment fell 33.8% y-o-y to $410 million with lower operating revenue, fixed margin erosion, and operating expenses related to Covid-19 such as onshore care agents and debt provisions from financial hardship relief.

Group Enterprise saw a slight 4.5% y-o-y dip in operating revenue to $1.38 billion mainly due to continued declines in carriage services and “weak business sentiment”. The dip also registered lower mobile service revenue due to declines in roaming and voice, equipment sales, and ICT revenue growth. This was slightly mitigated by the new wins from the data centre revenue. EBITDA for the segment fell 12.9% y-o-y to $363 million after including some $43 million of Jobs Support Scheme credits.

For the telco’s Group Digital Life segment, operating revenue declined 49.2% y-o-y due to the reduction in Amobee’s revenue and the cessation of HOOQ’s business. HOOQ was placed under liquidation in March. Amobee’s revenue fell due to a “significant” cut back in advertising spend due to Covid-19 and a reduction in TV revenue following the licensing of its technology platform to ITV plc from July 2019. Negative EBITDA rose to $18 million from $12 million for the quarter.

In the same quarter, post-tax contributions from the regional associates rose 5.6% y-o-y to $267 million primarily due to higher mobile average revenue per user (ARPU) in India, which mitigated the declines from Telkomsel, AIS, and Globe, which were affected by the lockdowns due to the pandemic.

For 1Q20, Singtel took a net exceptional charge of $364 million compared to the $34 million in 1Q19. The charges mainly comprised Singtel’s share of Airtel’s additional provisions for the adjusted gross revenue matter following the Supreme Court of India’s decision in July and exceptional tax charges. The charges were partly offset by a dilution gain of $550 million on Singtel’s reduced equity interest in Airtel following a successful share placement with institutional investors by Bharti Telecom.

See: Singtel to book another $911 million in charges from Bharti Airtel stake

“Despite the challenging conditions, we are witnessing an unprecedented adoption of digital services among consumers and companies and the digital investments we have made in recent years put us in a strong position to capture these new revenue opportunities,” says Group CEO Chua Sock Koong.

“Following our 5G licence win in Singapore, we’ve embarked on our 5G rollout to strengthen our network and market leadership to capture new growth opportunities and will continue to transform our operating model for greater efficiencies, better customer experiences and leaner cost structures. We have not let up in our ongoing business contingency plans to keep our operations running optimally and our staff safe and supported,” she adds.

Shares in Singtel closed 2 cents higher, or 0.8% up, at $2.44 on August 14.