SingTel profit dips on forex losses

Dylan Bushell-Embling
11 Aug 2011

SingTel has revealed its first quarter profit slumped 2.9%, due to forex woes and finance and tax expenses.

The company reported net profit of S$943 million ($773 million), and 7.4% higher group revenue of S$4.29 billion.

SingTel's core businesses in Singapore and Australia – through subsidiary Optus – each grew revenue around 2% - and the stronger Australian dollar meant Optus' contribution in Singapore dollars grew 10.1%.

But pre-tax earnings from the company's regional affiliates slumped 10% due to weaker local currencies and ongoing losses from Bharti Africa.

Due to the Africa losses, the contribution from SingTel's 32.04% stake in Bharti Airtel fell 19.6% to S$154 million.

The SingTel group's total subscriber base grew to 416 million, up 19% from a year earlier. In Singapore, SingTel added 57,000 postpaid mobile subscribers, and estimates it grew its market share to 45.3%.

Australia: Optus vs Telstra

Optus added 113,000 postpaid mobile customers, SingTel said, and increased its mobile revenue 5% to S$1.49 billion.

But Ovum estimates that Optus' market share fell nearly 1% to 31.8% during the financial year ending in June, and its ebitda margins are under pressure.

Optus' loss was rival Telstra's gain. The incumbent operator reported it had added 1.66 million new domestic mobile customers, of which 645,000 were post-paid, over the financial year.

Mobile revenues grew 11%, and its mobile market share grew to 43% from 39.6% a year ago, according to Ovum.

“[But] the gains have come at a price – A$670 million ($702.6 million) in mobile opex in FY11 and 35% higher subscriber acquisition and retention costs,” senior analyst Nicole McCormick said.

Telstra reported a 17.5% slump in total profit for the year, and a mere 0.7% increase in overall revenue. But this result beat market expectations, and Telstra is forecasting low single digit ebitda growth for the year ahead.

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