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Airtel pinned for dragging Singtel Q1 down



Image: Singtel

Singtel Group has reported a slight dip in revenue of SG$21 million to SG$4.1 billion alongside a 2% drop in earnings before interest, tax, depreciation, and amortisation (EBITDA) to SG$1.18 billion for its first quarter of fiscal year 2020 to June 30.

Thanks to a SG$162 million exceptional loss by Airtel and increased depreciation, the Singaporean telco has seen its underlying net profit drop by 22% to SG$575 million and net profit fall 35% from SG$832 million to SG$541 million.

The loss by Airtel was related to provisioning for “derivative liabilities relating to customary indemnities provided to a group of investors of Airtel Africa and expenses relating to its listing”, as well as depreciating 3G assets and spectrum refarming.

In March, Singtel parted with SG$735 million to purchase shares in Indian telco Bharti Airtel, however its holding dropped from 39.5% to 35.2% after the share offer.

“The Airtel impact aside, business is stable as we continued to execute to strategy in the first quarter,” Singtel Group CEO Chua Sock Koong said.

“This was achieved against a backdrop of heightened competition, sustained industry headwinds and subdued economic growth.”

For its Singapore consumer segment, overall revenue was down 5% to SG$518 million with fixed revenue dropping 12% to SG$140 million, while mobile service revenue dropped SG$17 million to SG$248 million and equipment sales and leasing increased SG$14 million to SG$117 million.

Singtel now has 2.61 million postpaid customers, up 35,000 since last quarter, and 1.61 pre-paid customers, down 15,000 quarter-on-quarter. Average revenue per user (ARPU) was down across the board, with postpaid ARPU dropping 13% to SG$40 and prepaid ARPU down 7% to SG$17.

The enterprise segment also had a 5% overall revenue drop, recording SG$1.4 billion taken in during the quarter. Singtel cited weaker demand from government and finance customers in Australia, as well as price competition and cautious business environment as reasons for the decline.

The digital life group experienced a 17% jump in revenue to SG$301 million, the vast majority of which was made up of by Amobee.

In terms of EBITDA, consumer grew 0.6% to SG$799 million, enterprise went backwards by 7% to SG$417 million, and digital life cut its loss in half compared to the same time last year, being in the hole for SG$12 million.

From its regional associates, Singtel took in 14% less revenue to record $335 million. This was made up of SG$280 million from Telkomsel in Indonesia, up 18%; Thailand’s AIS was stable at SG$94 million; and Globe in the Philippines was up 4% to SG$98 million. Thai telco Intouch decreased 7% to contribute SG$26 million, while Airtel loss SG$162 million across India, Sri Lanka, and Africa.

Across the group, staff costs were down 7% from SG$677 million to SG$628 million. Optus saw a 20.5% cut in staff costs, while the rest of business had a 2% increase in staff costs. In headcount numbers, Optus staff numbers are down 12.7% to 7,114 at June 30, and the rest of the group has 16,120 staff, down 3%.

See also: Singtel to buy $525M worth of India’s Bharti Airtel shares

During the quarter, net cash outflow was SG$1.26 billion, including the SG$735 million for Airtel shares, as well as SG$202 million in capital expenditure for Singtel, split between SG$49 million on mobile network and SG$153 million on fixed and core infrastructure, and AU$340 million in capital expenditure for Optus split out as AU$235 million on mobile network and AU$105 millioon for fixed and core infrastructure.

For the rest of the fiscal year to 31 March 2020, the company said it is expecting overall revenue to grow by mid-single digit, and EBITDA to increase by high-single digit. Overall capital expenditure is set to hit SG$2.2 billion, with AU$1.4 million to be allocated to Optus.

Last week, ratings agency S&P downgraded its outlook for Singtel to negative.

“We revised the outlook on Singtel to reflect increasing competition in the company’s major operating markets and the concurrent elevated cash needs for capital expenditure and dividend payout,” S&P wrote.

“The outlook revision also reflects the risk of Singtel’s operating metrics deteriorating, or the company undertaking debt-funded investment or spending more than we anticipate.”

S&P said they do not expect the launch of TPG in Singapore to cause a decline in its business.

“We believe Singtel’s SIM-only and GOMO plans have captured more price-sensitive segments of the market,” the ratings agency said.

“Additionally, TPG’s network coverage remains lackluster in a country where consumers are used to almost-seamless connectivity. Unless TPG’s strategy substantially undercuts the market and its network quality improves, TPG may find it difficult to establish a strong foothold in the market.”

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The Bizarre Porsche Cayenne That Was Never Actually Made



Porsche’s engineers eventually came up with two designs for the Cayenne-PMF, both of which varied predominantly over the tail light. But ultimately, the entire idea was canned. With the Cayenne-PFM convertible idea, Porsche originally set to answer four key questions:

  1. If the windscreen and A-pillars are reduced, and the roof tapers over the rear half, would the car still offer a comfortable seating experience?
  2. If the Cayenne’s doors are elongated by 20 centimeters and it is offered as a two-door model, does it make sense from a practical standpoint?
  3. Is it possible to accommodate a quick-folding soft-top roof that also meets Porsche’s standards for quality and design?
  4. And the most important question of them all: How the rear should look?

Michael Mauer, Chief Designer at Porsche, remarked that “an SUV as a convertible is a challenge both aesthetically and formally.” Mauer, who wasn’t a part of Porsche back then, added that “very strange shapes” emerge when an SUV’s bulky body is amalgamated with a convertible’s smaller, open-roof looks (per Porshe). However, it was not the just aesthetic and practical failures that put the Cayenne convertible plans on cold ice. 

“Forecasts regarding profitability were not particularly promising and doubts remained as to whether the car would look as appealing as a Porsche should,” says the official blog marking the 20th anniversary of Porsche’s venture into the SUV segment. As for the one-off Cayenne-PMF convertible unit, it lives on at the Porsche Museum in Germany’s Stuttgart.

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Tesla Body Damage Repairs Cost Way More Than You Might Expect



In a YouTube video, Ryan Shaw, a creator who specializes in Tesla and Tech content, described just how much it might cost to repair a Tesla after an accident. According to him, the repair cost of his Tesla Model Y after a rear-end collision was almost $20,000! Some of the most expensive parts that were replaced included the lift gate at $1,200, the quarter panel at $1,150, and the rear bumper at $680. Ryan Shaw’s Tesla Model Y was also involved in another rear-end collision with a repair bill that cost around $10,000. Lucky for him, the repair costs of both accidents were covered by insurance.

It’s not the first time that Tesla vehicles have proven to have expensive repair bills — a windshield replacement for a Tesla Model X could cost you as much as $1,311 without labor. Another YouTuber, Rich Rebuilds, claims he fixed a Tesla Model 3 at his garage for $700 after Tesla estimated the repair cost at $16,000. Also, a Tesla owner based in Finland decided to blow up his Model S after Tesla estimated a cost of $22,600 to replace the battery (via Gizmodo).

Similar stories are all over the internet, and even though the can’t all be verified, it’s a concern that most Tesla owners complain that repair costs are too expensive without a warranty or insurance cover. At the moment, Tesla discourages its customers from taking their cars to third-party repair services.  

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Supercar Brands You’ve Probably Never Heard Of



In 1990, an unnamed businessman from the UAE contacted German racing car manufacturer Lotec and asked for the fastest car in the world. With the promise of a blank check, Lotec began developing the car in 1991, and by 1995, the C1000 was finished. It featured a 5.6L Mercedes twin-turbocharged V8 engine that made over 1,000 horsepower. According to Motor1, Lotec claimed the car had a 0-62 mph time of just 3.2 seconds, and a top speed of 268 mph. The C1000 was strictly a one-off, but at a development cost of $3.4 million, it’s not like many other buyers could have afforded one anyway.

Creating the C1000 gave Lotec owner Kurt Lotterschmid the supercar bug, and shortly after development finished, he set about building a follow-up. By 2001, the brand’s next car, the Sirius, was unveiled. It was planned that five units a year would be created, each car selling for $462,000. The Sirius featured a mid-mounted Mercedes V12 making 850 horsepower, with many of the car’s internals derived from Lotec’s racing parts bin. It was a similar recipe to the Pagani Zonda, which launched just a few years prior, and shared the same engine. However, unlike Pagani, Lotec couldn’t drum up much interest in its ultra-expensive supercar, and only one example of the Sirius ended up being built.

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