China Mobile reveals COVID-19 scarcely touched Q1 revenue and profit

Although it did kick a hole in product sales and put a rocket under TXT


China Mobile has issued un-audited Q1 results that reveal the impact of the novel coronavirus on the world’s largest mobile carrier, and perhaps on China itself.

Revenue was down two percent to RMB 181bn (US$25bn) and profit dipped 0.8 percent to RMB 23.5bn (US$3.32bn). Telecoms services grew by 1.8 percent.

As China was impacted by and reacted to COVID-19 ahead of other nations, increased demand for communications services seems natural. However investors were warned that as the pandemic is ongoing, balance sheet impacts could appear in future quarters.

Among the other viral impacts revealed in yesterday’s filing [PDF] are:

  • A fall of 34.9 percent in revenue from the sales of “products and others” that the carrier said was “mainly caused by contracted sales of handsets and IoT devices, among other products, due to COVID-19”;
  • A year-on-year jump in SMS usage of 45.4 percent, attributed to increased business use of SMS during a certain viral pandemic;
  • Monthly handset data traffic recording a year-on-year increase of 43.4 precent and hitting 8.3GB per user;
  • 661.4 billion minutes of voice traffic on China Mobile networks for the quarter, which is a staggering number but 16.3 percent down year-on-year. Coronavirus was blamed for only a part of that fall, with over-the-top services also biting;
  • A dip in mobile customers, down 3.9 million;
  • 31.72 5G customers, which looks to represent doubling that user base in a quarter, given the company’s FY19 annual report mentioned 15.5m 5G users.

Investors were told the company sees opportunity as China emerges from the peak of its pandemic: “Leveraging the demand for informatization services brought about by measures to prevent and control COVID-19 and the resumption of work and production, the Group has also accelerated business transformation and upgrade,” the filing says.

However there’s also hints of future pain coming, with warnings of “higher 5G-related costs” and plans to “continue to develop new sources of revenue and identify ways to curtail expenses, while taking measures to reduce costs and enhance efficiency.”

As the filing reports un-audited results, investors were told to exercise caution when trading its shares. ®

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