First Optus profit gives SingTel financials a boost

7 Feb 2003

Singapore Telecommunications (SingTel) [TELE.SI] posted better than expected third quarter earnings largely thanks to its Australian Optus unit delivering a first profit since it was purchased in the latter half of 2001. With the Australian economy performing relatively well in a time of global economic slowdown, Optus, the country’s second largest telco, helped SingTel to push net income up 2% year-on-year to SGD296 million (USD170 million) for the three months to 31 December 2002. The group’s operating revenue was up 9.5% to SGD2.6 billion (USD1.5 billion), although increased competition in its home market led to a 3.3% fall in Singapore revenues to SGD1.17 billion (USD670 million). In stark contrast Optus reported a 16% rise in revenues for the quarter, to AUD1.45 billion (USD850 million), and posted net profit of AUD22 million (USD13 million), it also reported a net cash surplus of AUD64 million (USD 38 million). The rise in Optus’ fortunes can be pinned to its success in the mobile sector where it has managed to steal customers from rival Telstra to boast a 12% growth in subscriber figures to 4.5 million, a 34% share of the market.