M1 net profit improves 19.4% to S$39.5m

Beating expectations and attracting positive outlooks.

M1 reported a 19.4% y-y increase in net income to S$39.5m in 3QFY13, with service revenue cimbing higher due to better mobile revenue and fixed services revenue, noted PhillipCapital.

"We continue to like M1 and maintain our positive outlook due to 1) Growth in mobile and Fibre broadband customer base; 2) Continuing take-ups in tiered data plans, driving higher mobile revenue; 3) More customers exceeding data allowances; 4) Dividend yield of 4.3% continues to be attractive."

DBS explained M1's higher revenue came mainly from the growth in its customer base.

Meanwhile, international call services revenue dipped as retail revenue declined. Operating expenses also came in lower, "as lower handset costs mitigated the increase in staff cost," said DBS,

These all led to M1's EBITDA margin on service revenue rising in 3Q13 to 37.7%. Net income rose above DBS' expectations due to the combined strong service revenue and lower expenses.

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