8 Nov 2006
State-controlled Singapore Telecommunications (SingTel) reported underlying net profit before goodwill and one-off items of SGD899 million (USD577 million) in its fiscal second quarter to 30 September 2006, up 20% on the SGD752 million it recorded in the corresponding period of 2005, and beating analysts’ consensus forecasts. Quarterly net profit reached SGD956 million, up from SGD806 million previously and higher than the average forecast of SGD804 million polled from a Reuters survey. In the wake of the result however, SingTel reiterated its full year guidance of flat operating revenues and earnings before interest, tax, depreciation and amortisation (EBITDA). Following the announcement, SingTel shares climbed by more than 3% in early trading, to reach their highest level in more than five years.
SingTel said its Q2 results were bolstered by its subsidiaries and regional affiliates. The operator has interests in telecom firms in Thailand, Indonesia, the Philippines, India and Bangladesh, and has also expressed an interest in entering the Vietnamese market. It derives around 75% of its sales and two-thirds of pre-tax earnings from operations outside Singapore. Quarterly net profits from its affiliates rose by 48% to SGD395 million, driven by Indonesian mobile operator Telkomsel and India’s Bharti Group, supported by Globe Telecom in the Philippines. Meanwhile, the group’s Australian unit Optus, reported a 12% drop in quarterly net profit in the face of intense competition, slow subscriber growth and regulatory changes that have impacted on its bottom line.