M1 (formerly: MobileOne)

[corydorus]

http://infopub.sgx.com/FileOpen/FY17SGXA...eID=486064

M1's full year profits is out. Profit decline has slowed to single digit negative reversion and that is good. Its mobile phone segment's revenue has stabilized after the price war among the 3 telecos. What is good is that M1 has grown its user base in 2017 by 3.6%, despite Singapore's overall population growing by 0.1% YoY.

However handset sales is declining probably due to more people opting for SIM-only plans which means the public are moving to to buying handsets separately from contracts and this is hurting M1.

No doubt debt has increased, but it should not be too big an issue until 2020; when 2.45% interest can no longer be given

What amazed me was the final dividend amount of 6.2 cents. The total dividend payout amount will be 57.6 mil, and that is more than the amount of cash holdings M1 has reported on its balance sheet (46.5 mil). While it is true that M1's generates about 28 mil of free cash flow per quarter. The dividends declaration will be eating into cash flow generated in next Q1. Wonder if this is a sign of how cash hungry its parent companies are.

Two questions in my mind.

Expenses decreased by 10M. Is this sustainable ? 
Rev decrease despite increase users. What this means ?