M1 Limited announced the unaudited group financial results for the six months ended 30 June 2012.

Net profit after tax decreased 11.5% to $75.5 million due to higher handset subsidies.

Service revenue grew 2.4% to $382 million, driven by growth in customer base and higher contribution from fixed services.

Free cash flow remained healthy, increasing 38.1% year-on-year to $85.6 million.

Revenue from non-voice services rose by 1.9 percentage points to 37.1% of service revenue, driven by continued growth in smartphone customer base. This now accounts for 71% of total postpaid customer base.

During the second quarter, M1 added 21,000 customers, bringing the total mobile customer base to 2.035 million as at 30 June 2012. Monthly postpaid churn improved to 1.3%, compared to 1.5% in the preceding quarter. As at 30 June 2012, M1 had 56,000 fixed services customers and out of which, 37,000 were fibre customers.

The launch of nationwide LTE services is scheduled towards the end of the third quarter. Tiered smartphone plans will be announced at the same time.

The recent changes to the terms of the OpenNet wholesale agreement, including an increase in the activation quota, will improve service activation time and help drive take-up of fibre services. M1 said it will continue to step up efforts to grow our customer base in both residential and non -residential segments.

“The strong interest in new high-end smartphones will contribute to revenue growth over the two-year period. The handset subsidies expensed upfront have an immediate impact on profitability”, said Ms Karen Kooi, Chief Executive Officer of M1.


M1’s Board of Directors has declared an interim dividend of 6.6 cents per share.