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SingTel reports fall in 2Q profit, impacted by Ozzie operations

14 Nov 2012

Southeast Asia’s leading telecommunications company, Singapore Telecom (SingTel), has reported a 1.6% year-on-year fall in net profit for its fiscal second-quarter ended 30 September 2012, undermined by rising costs and lower turnover at its Australian business SingTel Optus. The group booked net profit of SGD868 million (USD710 million) for the July-September period, compared to SGD882 million in the year-earlier period, on revenues of SGD4.57 billion, which was down 0.8%, it said. Underlying net profit was stable at SGD886 million it added, impacted by higher depreciation charges and acquisitions.

The group’s wholly owned Australian subsidiary is fighting slow revenue growth in its home market due to strong price competition and a government-mandated cut in mobile phone termination rates (MTRs). SingTel Optus booked net profit for the quarter of AUD164 million (USD171 million) down 10% year-on-year, while operating revenue eased 4.2% to AUD2.24 billion. ‘In Australia, price competition and reduced mobile termination rates have led to negative mobile industry revenue growth,’ SingTel noted, adding, ‘Optus is increasing its focus on customer experience and yield management while restructuring its business model to deliver greater efficiencies.’

In its home market, SingTel booked revenues of SGD1.67 billion, up 4.4% y-o-y, and said that most of its regional mobile phone associates also delivered strong contributions despite depreciating currencies. Pre-tax earnings from its regional associates increased by 17% y-o-y to SGD549 million, driven by strong operational performances from Telkomsel (Indonesia), AIS (Thailand) and Globe Telecom (Philippines), which helped to offset lower contributions from India’s Airtel.

As at end September 2012 its mobile customer base across the region stood at 468 million, up 11% from the year before.

Singapore, Optus, Singtel Group

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