Optus user growth drives profit rise | Coffs Coast Business | Business News for Coffs Coast, Australia

AAP

OPTUS has managed to hold on to its position as the nation's No.2 telco after reporting a 16 per cent jump in net profit for its third quarter, driven by increases in mobile phone revenues and customer numbers.

Optus on Tuesday posted an increase in net profit to $165 million for the three months to December 31, 2009 up from $143 million in the previous corresponding period.

The third quarter result took net profit for the nine months to December 31 to $456 million, up 17 per cent on the $390 million in the previous corresponding period.

Mobile phone offerings comprised 63 per cent of Optus' revenue in the third quarter. This was up two percentage points from the same quarter in 2008.

Mobile phone offerings made up 68 per cent of total earnings before interest, tax, depreciation and amortisation (EBITDA) in the latest third quarter.

Growth in the mobile business was driven by robust customer acquisition and the rising popularity of smartphones such as iPhones, Optus said.

The telco said it added 19,000 customers in the third quarter to take its total customer base to 8.24 million, despite the deactivation of 272,000 inactive prepaid accounts.

The number of 3G customers grew by 8.7 per cent to 3.34 million in the quarter, which helped drive mobile revenue up 9.6 per cent to $1.46 billion for the three months to December 31.

EBITDA was $358 million, up 5.3 per cent on the previous corresponding period.

EBITDA margin, which measures the amount of revenue used by operating expenses, remained relatively stable at 25 per cent.

Ovum analyst Nathan Burley said the results showed Optus had managed to hold on to its position in the highly competitive mobile market, just ahead of Vodafone Hutchison Australia (VHA).

"It is probably a good performance, but not a great performance in mobile," he told AAP.

"You've got growth probably broadly in line with the market, maybe slightly above, but we won't know for certain until Telstra and VHA report their figures.

Optus parent company Singapore Telecommunications Ltd (SingTel) reaffirmed the group's full year guidance, which for Optus is single-digit operating revenue and earnings growth and stable free cash flow.

Optus posted operating revenue of $2.3 billion in the third quarter, up 4.8 per cent on the same period last year.

EBITDA grew by 3.9 per cent on the previous corresponding period to $529 million.

Third quarter free cash flow was $205 million, down 24.4 per cent on the previous corresponding period, but free cash flow for the nine months to December was up 12 per cent to $616 million.

SingTel reported a $S991 million ($806.9 million) net profit for the third quarter, up 24 per cent on the previous corresponding period.

Revenue of $S4.45 billion ($3.62 billion) for the third quarter represented a 20.2 per cent increase on the previous corresponding period, and was driven by growth in its Singapore and Australian businesses and a stronger Australian dollar.

SingTel shares were up six cents, or 2.53 per cent, at $2.43 at 1317 AEDT.