Singapore Telecommunications, Southeast Asia's largest phone company, posted a 9.6 percent rise in quarterly underlying profit on Tuesday, as robust Asian mobile growth offset a margin squeeze at its Australian unit Optus.
SingTel, Singapore's largest listed firm, maintained its guidance for higher earnings before interest, tax, depreciation and amortization (EBITDA) and single-digit operating sales growth for its domestic operations in its fiscal year ending March.
The state-controlled firm made underlying net profit before goodwill and exceptionals of S$931 million (US$658.9 million) for the fiscal third quarter ended Dec. 31, compared with S$850 million in the year-ago period.
The result was above an average net profit forecast of S$918.8 million from a Reuters survey of five analysts.
Excluding compensation from the Singapore telecoms watchdog for loss of monopoly status, SingTel's underlying net profit surged 22 percent.
Attributable net profit, however, fell 4.2 percent to S$952.3 million ($674 million) due to foreign exchange losses and after the year-earlier quarter was boosted by exceptional gains from a property sale.
Group operating revenue jumped 11 percent to S$3.83 billion, thanks to higher revenues in Singapore and the appreciation of the Australian dollar.
Facing a domestic market of just 4.7 million people where virtually everyone owns a mobile phone, SingTel has spent S$18 billion ($12 billion) in recent years buying stakes in mobile phone operators in high-growth Asian nations, and in the bigger Australian market.
It now derives about 75 percent of revenues and two-thirds of pre-tax earnings from operations outside Singapore.
Optus, Australia's second-largest mobile operator and SingTel's single-biggest revenue and profit generator, posted a 5.9 percent rise in quarterly underlying profit to A$143 million ($129.9 million).
The unit, which holds a third of the mobile market, faces cut-throat price competition, ebbing subscriber growth and regulatory changes in a saturated domestic market, where more than eight in 10 people own a phone. It battles market leader Telstra, Vodafone Group and Hutchison Telecommunications.
Besides Optus, SingTel also owns big stakes in six emerging market mobile operators, including 30.5 percent in India's Bharti, 44.5 percent in Globe Telecom in the Philippines, and 35 percent in Indonesia's Telkomsel.
Most of these investments have shown phenomenal growth in wireless subscribers in recent years.
Excluding exceptionals, pre-tax earnings from the associates rose 30 percent to S$656 million in the quarter, driven mainly by Telkomsel, Bharti and Globe.
SingTel shares traded flat in the October-December quarter, compared with a 6.7 percent decline in the broader Straits Times Index