Overseas expansion boosts SingTel financials

South-east Asia’s largest carrier Singapore Telecommunications (SingTel) [TELE.SI] posted a 41% rise in operating profit year-on-year thanks to a strong performance from its overseas operations, headed by its Australian telco SingTel Optus. Over the last four years, as the communications market in Singapore rapidly approaches stagnation, SingTel has invested SGD17 million into the Australian, Indonesian and Indian markets. SingTel faced a barrage of criticism following its costly buyout of Optus in September 2001 but the company’s annual report looks set to silence the doubters. In the year to 31 March 2003 overseas revenues accounted for 65% of the group’s SGD10.26 billion turnover, up from a 49% share the year before. Revenues in Australia grew from AUD4.81 billion to AUD5.55 billion as Optus reached its profitability targets nearly a year early to report a pre-exceptional net profit of AUD28 million, a AUD430 million turnaround over the year. Overseas ventures helped SingTel to an operating profit of SGD10.3 billion, however, the cost of its expansion resulted in a 14% drop in net profit to SGD1.4 billion, mainly due to higher goodwill and interest expenses.