Singtel Q3 profit falls 14%

15 Feb 2019
00:00
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Daily News

Singtel has reported a 14% slump in net profit for the December quarter, largely as a result of the financial pressures faced by Indian mobile associate Bharti Airtel.

Singtel reported a Q3 group net profit of S$823 million for the quarter. Operating revenue grew 1%, or 4% in constant currency terms, to S$4.63 billion.

But intense competition in India, higher depreciation and amortization costs from regional associates and lower NBN migration revenue in Australia all impacted the group's bottom line during the quarter.

Domestic consumer revenue fell 6% for the quarter, despite growing data usage while revenue from Singtel's wholly-owned Australian subsidiary Optus grew 6%, in part due to strong postpaid mobile customer growth.

Meanwhile group enterprise revenue increased 1%, with ICT services revenue up 9% and cyber security revenue growing 10%.

Pre-tax earnings from Singtel's regional associates fell 33% to S$342 million. As well as price pressures in India, these earnings were impacted by declining profit from Thailand's AIS.

In Indonesia, Telkomsel's revenue was stable year-on-year while in the Philippines, earnings increased due to strong mobile and fixed data revenue growth.

Singtel Group CEO Chua Sock Koong said there are signs of market stabilization in India, giving the group confidence in its overseas investments.

“Our long-term view on our regional associates remains positive as they continue to ride the growth in data and execute well against the challenges and competition,” she said.

“We expect the regional markets to revert to more sustainable market structures and deliver long-term profitable growth. Meanwhile, we are working closely with them to build a regional ecosystem of digital services that leverages the Group’s strengths and unlocks the value of our joint mobile customer base of over 675 million.”

For the full year ending in March, Singtel is projecting a low single digit increase in core operating revenue, but a low single digit decline in ebitda.

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