Optus profit falls, more jobs go

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Optus profit falls, more jobs go

Optus has suffered a drop in net profit for its second quarter and first half of fiscal year 2013, and cut a further 184 jobs in October alone as part of a company-wide restructure.

Net profit for the quarter ending September 30 came in at $164 million, compared to $182 million last year. Revenue fell $100 million to $2.2 billion compared with the previous corresponding quarter.

The second quarter results affected the telco’s half yearly financials, with six monthly net profit at $325 million, down 8 percent, and revenue at $4.5 billion, a drop of 4 percent. 

Optus parent SingTel blamed the fall on a drop in mobile revenue, equipment sales and the introduction of service credits to repayment plans, as well as a company-wide restructure which has seen around 1000 workers lose their jobs in the last year.

"Mobile industry growth rates have slowed as a result of price competition and mandated reduction in mobile termination rates," SingTel said in an ASX release.

Optus initially planned to cut 750 jobs from its workforce throughout the year as part of a restructure designed to streamline its business.

It slashed 475 jobs from its consumer division before June. 109 jobs went in the June to September period, and 350 positions will be let go from October - an additional 184 than planned, bringing the total for June to October to 459, and 934 jobs lost overall. 

The restructure has cost the company around $30 million. 

The telco added 132,000 extra post-paid customers the past quarter, thanks in part to an additional 60,000 users from its $230 million acquisition of Vividwireless, while pre-paid customers fell by 100,000.

Its overall customer base rose to 9.54 million, but discounts on bundled plans saw its ARPU (average revenue per user) decline.

Optus’ Business Fixed division was the only unit that grew, with revenue for the quarter up 0.7 percent to $325 million. It was also up $2 million to $651 million for the half year.

Optus’ mobile, wholesale and consumer & SMBs divisions all saw revenue decline. Consumer & SMB was the hardest hit, with a 5.8 percent drop to $302 million for the quarter, followed by Optus mobile, which fell 5 percent over the same period. Mobile was down 4.7 percent to $2.8 bilion for the half year.

The disappointing numbers saw SingTel cut its guidance for Optus’ full-year revenue. It predicted operating revenue would decline by ‘mid-single digit level’ for the fiscal year ended March 31 2013. It had initially forecast a similar change but in the opposite direction.

SingTel’s overall second quarter net profit fell 1.6 percent to $868 million, weighed down in part by Optus’ performance. 

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