SingTel’s second-quarter income falls 12.1%

12 Nov 2008

Southeast Asia’s largest telecoms group by subscribers Singapore Telecommunications (SingTel) today reported a 12.1% fall in net profits for its fiscal second quarter ended 30 September 2008, as fluctuations in regional currencies and rollout costs for Apple’s iPhone handset impacted on its bottom line. SingTel reported a net profit of SGD868 million (USD586 million) in the period under review, down from SGD988 million in the corresponding period of 2007 and below the SGD859.8 million projected in a Dow Jones Newswires poll of analysts. Group operating revenues reached SGD3.89 billion, up 5.3% from SGD3.69 billion a year earlier, it said in a statement. Commenting on the performance SingTel’s group chief executive officer Chua Sock Koong said: ‘Our expansion in the region subjects us to the volatility of the regional currencies’ while ‘A stronger Singapore dollar reduces our mobile associates’ earnings’, adding, ‘The current global financial crisis is unprecedented and the negative impact on businesses will be inevitable.’

The telco’s operating expenses increased 18% year-on-year to SGD834 million, partly the result of costs related to the rollout of the iPhone in Singapore and Australia. ‘For the second quarter, the incremental impact of the iPhone 3G activations reduced EBITDA by approximately SGD27 million in Singapore and approximately AUD44 million (USD29.46 million) in Australia.’ Pre-tax profit contributions from its regional mobile associates dropped 26% to SGD461 million in the second quarter, including the SGD41 million loss from Pakistani associate Warid Telecom. Alongside Waird, the Singaporean group also holds key stakes in five other cellcos in the region: Bharti (India), Indonesia’s Telkomsel, AIS in Thailand, Globe Telecom of the Philippines and Pacific Bangladesh Telecom. Chua said that the Indian rupee, Indonesian rupiah, Philippine peso and Thai baht all depreciated against the Singapore dollar during the quarter, resulting in currency translation losses for the group. Added to this, the weak Australian dollar impacted on earnings at a group level even though its local unit Optus reported a 6.8% rise in quarterly revenues.

Singapore, Singtel Group