SingTel's Profit Falls 16%, Feels Global Slowdown

SingTel, Southeast Asia's largest phone company, posted a 16 percent drop in quarterly net profit and said it had begun to feel the effects of the global economic slowdown.

Ahead of the earnings, ABN AMRO Australia said future earnings could be hit by a worsening outlook for mobile associates in Indonesia, Thailand and the Philippines.

Singapore Telecommunications, 55 percent-held by state investor Temasek, said fiscal third-quarter net profit fell to S$799.3 million ($536 million) from S$952 million a year earlier mainly due to Singapore dollar's strength against currencies in countries where it operates.

The results were above an average S$770 million forecast by four analysts polled by Reuters.

Singapore's largest listed firm said its October-December underlying net profit, or net profit excluding exceptional items, fell to S$838 million from S$931 million a year earlier, broadly in line with market expectations. Shares of SingTel were down 0.4 percent in early trading in Australia.

"The global economic slowdown has started to impact the group," SingTel chief executive Chua Sock Koong said in a statement.

SingTel affirmed its guidance for the fiscal year ending March 2009 that operating revenue from Singapore and Australia will grow by single digits. Pretax profit contribution from regional associates will be lower partly due to the stronger Singapore dollar, it added.

SingTel, which owns Australia's number-two telecom firm, Optus, said its Australian operations' earnings before interest, tax, depreciation and amortisation (EBITDA) rose 1 percent to A$510 million ($348.6 million) during the quarter.

EBITDA from Singapore rose 14 percent to S$561 million, while EBITDA from regional mobile phone associates fell 27 percent to S$462 million.

SingTel's operating revenue fell 3.2 percent to S$3.7 billion from S$3.8 billion a year ago.

SingTel owns about 35 percent of Indonesia's PT Telekomunikasi Selular (Telkomsel), around 30 percent of India's Bharti TeleVentures, 21 percent of Thailand's Advanced Info Service and 45 percent of Philippines' Globe Telecom. It also has stakes in other operators such as Pakistan's Warid.

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Reliance Communications' plan to launch GSM mobile services in India will also affect Bharti's near-term performance, ABN AMRO said.

During the December quarter, the Singapore dollar gained a fifth against the Australian dollar and a tenth against the Indonesian rupiah, according to calculations by DBS Vickers.

With a domestic market of only 4.8 million people, where virtually everyone has a mobile phone, SingTel has spent S$18 billion in recent years to expand overseas through acquisitions.

SingTel shares lost 22 percent in October-December, just beating a 25 percent drop on the Straits Times Index.

Copyright 2009 Reuters. Click for restrictions.