5 May 2005
Singapore Telecom (SingTel) has reported a 47% year-on-year fall in fourth-quarter profits to SGD1.04 billion (USD636 million) for the period ending 31 March 2005, but says the drop is largely due to a USD1.61 billion one-time gain last year from the sale of its stake in Belgacom which boosted its quarterly profit six-fold. Excluding the one-off gains, costs relating to the amortisation of goodwill and contributions from investments sold in the period, profits for Q1 2005 rose by 40% to SGD881 million. Sales climbed 2.6% to SGD3.25 billion and operating profit was up 8.2% at SGD1.2 billion. Nonetheless, the results failed to put a smile on analysts’ faces who believe the company has generally overpaid for its expansion in the region. SingTel CEO Lee Hsien Yang has spent billions in the last four years in buying stakes in phone companies in Asia to help offset stagnation in the company’s home market. However, growth is slowing at SingTel Optus (Australia) – its most profitable unit – and Lee now has to target less developed markets in India and Indonesia to bolster future growth.