SingTel – BT
SingTel Q2 profit dips 1.2%
Regional associates drag down group net profit to $882m from $892m
SINGAPORE Telecommunications’ (SingTel) second-quarter earnings disappointed as its regional associates dragged down group net profit 1.2 per cent to $882 million from $892 million a year ago.
Earnings per share eased to 5.53 cents from 5.56 cents.
SingTel, however, managed to grow top line for the July-September period 4 per cent to $4.6 billion from $4.4 billion last year, helped by strong customer growth in Singapore, Australia and other overseas units.
Weakened regional currencies against the Singapore dollar were much to blame for the 12 per cent decline in pre-tax earnings at SingTel’s regional associates to $471 million. Major regional currencies such as the Indian rupee and Indonesian rupiah slid between 5 and 9 per cent against the Singapore dollar.
In constant currency terms, the decline would have been less severe at 6 per cent.
SingTel’s associates increased their proportionate contributions to group turnover by 4.4 per cent to $2.78 billion from $2.66 billion last year.
Pre-tax profit at Bharti Airtel, which operates in South Asia and 17 African countries, was the worst performer, falling 37 per cent y-o-y to $131 million.
Its Indian operations were hit by 3G costs and higher interest expenses.
Meanwhile, the floods in Thailand have not affected SingTel’s Thai associate Advanced Info Systems (AIS), said Hui Weng Cheong, SingTel’s CEO International. Affected base stations are ‘getting back on track’ and telecomms usage has increased during the flooding, he said.
In its home territory, revenue was flat at $1.6 billion, as only the mobile business of the four units grew. The mobile business grew 9 per cent y-o-y to $477 million from $437 million on the back of strong customer growth. SingTel scored a consecutive quarter of market share gains and now commands 45.5 per cent of the mobile market here.
Where faster Long-Term Evolution (LTE) mobile networks are concerned, SingTel’s CEO Singapore Allen Lew said that SingTel intends to explore a different pricing strategy from that of 3G.
However more details would be delivered in a month’s time, he said.
‘I think we are going to try for LTE to change the game in terms of how we price data,’ said Mr Lew.
‘Certainly, we don’t want LTE to go the way of 3G where there’s unlimited data and people giving us feedback about inconsistent speeds.’
SingTel also said that its long-term strategy of upping its stake in associates remains unchanged. It increased its holding in AIS by 2 per cent in early November for $328 million.
‘In other associates, if there are stakes available, we are definitely prepared to get in on the right terms and conditions,’ said Chua Sock Koong, SingTel group CEO.
SingTel ended yesterday two cents up at $3.18.