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SingTel’s fourth-quarter net income dragged down by Bharti contribution

12 May 2011

Singapore Telecommunications (SingTel) today reported it posted net profit of SGD991.7 million (USD805.4 million) in its fiscal fourth quarter ended 31 March 2011, down 2% compared with SGD1.02 billion a year ago, mainly due to a lower contribution from its regional mobile associates – in particular Bharti Airtel of India. SingTel booked operating revenue of SGD4.64 billion for the period under review, up 3.8% from SGD4.47 billion in the year-earlier period, but pre-tax profits from SingTel’s regional mobile associates – Australia (Optus), Bangladesh (PBTL), India (Bharti), Indonesia (Telkomsel), Pakistan (Warid Telecom), the Philippines (Globe Telecom) and Thailand (AIS) – fell 12% year-on-year to SGD479 million, dragged down by the Indian venture, whose contribution was down 29% to SGD173 million. Bharti posted a bigger-than-expected 31.5% fall in net profit in January-March and said its loss-making operation in Africa, which it acquired from Kuwait’s Zain for around USD9 billion in 2010, is expected to impact on its near-term earnings. In a statement SingTel said that for the financial year ending 31 March 2012, its operating revenue [in its home market] is expected to grow at low single-digit level, driven by higher mobile and mio TV revenue. ‘Over the mid to longer term, the African economies are anticipated to drive market-friendly economic reforms to deliver future growth,’ it added.

Commenting on the latest financial results, SingTel chief executive officer Chua Sock Koong said: ‘We are investing to capture new growth opportunities, through greater emphasis on innovation within and outside the Group. These investments may impact our earnings in the short term but are essential for our growth. To complement our innovation efforts, we will review strategic investments that will help us gain economies of scale and important capabilities such as in multimedia and managed services’.

Singapore, Singtel Group

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