SingTel first-quarter profit down on weak performance from associates

12 Aug 2010

Singapore Telecommunications Ltd (SingTel) today reported first-quarter net profits of SGD943.2 million (USD690 million) for the three months to 30 June, down 0.2% from SGD945.4 million a year ago, due to lower contributions from regional mobile associates in India, the Philippines and Indonesia. SingTel’s group operating revenue for the period under review climbed 11.5% year-on-year to SGD4.29 billion from SGD3.85 billion though, driven by strong performances from its domestic telecoms business and SingTel Optus in Australia. Revenue in Singapore climbed 9.9% to SGD1.52 billion while turnover at Optus was up 2.6% at AUD2.3 billion (USD2.0 billion). When measured in Singapore dollar terms, revenues at Optus were up 12.3% y-o-y at SGD2.8 billion; net income climbed 22% to AUD170 million from AUD139 million previously.

However, pre-tax ordinary earnings from SingTel’s regional mobile associates fell 14.8% year-on-year to SGD551 million on the back of lower operating profit from Bharti Airtel (India), Globe Telecom (Philippines) and Telkomsel (Indonesia). SingTel, which is Southeast Asia’s largest telecoms group by revenue, holds significant stakes in six foreign mobile operators, the other three being Thailand’s Advanced Info Service (AIS), Pakistan’s Warid Telecom and Pacific Bangladesh Telecom Limited (PBTL). The Singapore-based firm said its total mobile customer base in the region grew to 351 million as at 30 June 2010, up 34% year-on-year from 262 million, fuelled by a net gain of 36.4 million customers from Bharti’s acquisition of the African assets of Zain Kuwait. However, Bharti’s pre-tax contribution to SingTel fell 22.7% to SGD210 million, mainly due to costs relating to the aforementioned acquisition. Contributions from Telkomsel in Indonesia dropped 10% y-o-y to SGD221 million as a result of higher operating expenses and depreciation charges toward network upgrades and expansion projects. Meanwhile, pre-tax contributions from its Filipino operation slumped 34% to SGD45 million as intense local competition squeezed the Globe’s revenue and bottom line. Warid Telecom posted a pre-tax loss of SGD14 million compared to a SGD15 million loss in the same period of 2009.