SingTel Posts 10.4% Rise in Quarter Net Profit, Beats Forecasts
Singapore Telecommunications, Southeast Asia's largest phone company, on Tuesday beat market expectations with a 10.4% rise in first-quarter net profit reflecting good business at home and abroad.
State-controlled SingTel -- Singapore's largest listed firm -- reported April-June attributable net profit of S$927 million (US$611 million) versus S$839.5 million last year and above an average net profit forecast of S$894 million by four analysts polled by Reuters.
Singapore Telecommunications said that it would stick to previously issued guidance for single-digit revenue growth in 2008 aided by improved mobile communications, data and information technology revenues.
Adding to the previous guidance the company said that to support increased business activities, additional capital expenditure would be required and the capital expenditure to revenue ratio is expected to be in low double-digits.
"We have made an excellent start to the new financial year with all our key businesses delivering strong earnings growth," SingTel's new Chief Executive Chua Sock Koong said in a statement.
"Our Singapore business delivered double-digit increase in revenue, which is unprecedented in recent years," said Chua who had replaced Lee Hsien Yang, the younger brother of Prime Minister Lee Hsien Loong, as CEO on April 1.
Chua said its Australian mobile phone business Optus also performed well by maintaining growth and profitability in a highly competitive environment while emerging market associates sustained their stellar growth.
SingTel said on Monday that it had 136.35 million mobile phone subscribers at the end of June, an increase of 12.6 million from the previous quarter.
SingTel is forecast to earn $3.56 billion in the full year from April-March, down about 6% from last year's $3.78 billion, according to the mean average of a Reuters Estimates poll of 15 analysts.
State-controlled SingTel, which owns Australia's No. 2 phone operator Optus and stakes in several Asian mobile firms, made underlying net profit, before goodwill and exceptionals, of S$868 million in the quarter, versus S$837 million a year ago. Quarterly operating revenue grew 10.5 percent to S$3.6 billion.
Facing a home market of just 4.5 million people, where mobile penetration has reached 100%, SingTel, has spent S$18 billion in recent years buying operators in high-growth Asian nations, and in the bigger Australian market. It now derives about 75% of revenues and two-thirds of pre-tax earnings from operations outside Singapore.
The company owns major stakes in five operators: 21.5% of Thailand's Advanced Info Service, 30.8% of India's Bharti Group, 44.6% of Globe Telecom in the Philippines, 35% of
Indonesia's PT Telkomsel and 45% of Pacific Bangladesh Telecom.
Optus has also been grappling with ebbing subscriber growth and regulatory changes in a saturated domestic market. It achieved a 12% rise in underlying net profit to A$122 million (US$103 million).
Optus, which holds a third of the Australian market, is SingTel's single-biggest revenue and profit generator. It competes with Telstra, Vodafone Group and Hutchison Telecommunications.
SingTel shares rose 3.7% in April-June, and have gained 2.4% so far this year, underperforming a 10.x percent rise in the benchmark Straits Times Index.