Optus net profit declines 24 per cent in Q3
- 13 February, 2020 13:48
Optus has reported a decline across its earnings and profit for the third quarter ending December 31.
The Singtel subsidary saw operating revenue slightly dip by one per cent to $2.3 billion while net profit sank 24 per cent to $131 million from the previous third quarter.
Excluding NBN migration revenue, earnings before tax (EBITDA) declined 22 per cent due to increased traffic costs from a higher NBN customer base and lower contributions from mobile equipment revenues.
With NBN migrations included, earnings before tax (EBITDA) came down 12.8 per cent to $254 million.
Optus Business quarterly revenue and EBITDA also declined year-on-year due to intense competition from new entrants reselling NBN services, the telco said. This also dragged down Singtel’s overall enterprise business revenue, which the telco said was impacted by cautious business sentiment and erosion in traditional carriage services.
“On a sequential quarterly basis, Optus Business posted higher revenue and EBITDA as improved orders reflect measures taken to stabilise the business,” the company said.
Mobile customers increased by 229,000 services, which includes 57,000 new postpaid mobile services and 157,000 prepaid mobile services.
Despite this, mobile service revenue declined three per cent due to a higher portion of SIM-only customers and data price competition, the telco said.
Optus’ NBN customer base grew by 254,000 customers from a year ago. Fixed retail revenue grew 46 per cent, driven by higher NBN migration revenue and strong NBN customer growth.
Optus CEO Allen Lew said it had been a transitional quarter for the business as it adjusts to SIM-only plans.
At the end of December the telco switched on more than 400 5G sites across the country.
Singtel Group CEO, Chua Sock Koong, also described the period as a challenging quarter, adding: "Weak macroeconomic conditions have weighed on our enterprise business and Optus saw eroding margins in its fixed retail business with the higher mix of NBN customers."