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SingTel beats forecasts with $988m quarterly gain
Chua Hian Hou Thu, Nov 08, 2007 The Straits Times
ASIA'S biggest telecommunications group, SingTel, surprised the market yesterday with better- than-expected second-quarter results. This came on the back of record profit growth at its Indian associate Bharti, along with strong operating revenue growth of 9.6 per cent in the Singapore market, generally seen as saturated. Overall, net profits for the quarter ended Sept 30 were up 3.3 per cent at $988 million, beating a $935 million median estimate of six analysts by Bloomberg. The group's revenues rose 10.9 per cent to $3.7 billion, and earnings per share rose 7.6 per cent to 6.21 cents.

Group chief executive Chua Sock Koong said SingTel's earnings had benefited from strong growth at home.

Revenue in Singapore was up 9.6 per cent at $1.21 billion, while net profits rose 3.7 per cent to $830 million.

Singapore's largest listed company is also enjoying good returns from its investments in regional operators in some of the 'the fastest-growing mobile markets in the world', she said.

Contributions from SingTel's overseas operations now account for 74 per cent of its bottom line, up from 71 per cent previously.

SingTel owns Australia's No.2 mobile operator Optus, and holds key stakes in six other telcos, including India's Bharti Airtel, Philippines' Globe Telecom, Thailand's AIS and Indonesia's Telkomsel.

Bharti, in particular, had done very well, announcing a 73 per cent jump in quarterly profits last week.

SingTel's investment in Pakistan's No.3 phone operator, Warid Telecom, Ms Chua said, may see 'some short-term impact' due to the country's current internal turmoil.

But 'we are in it for the long term...it's all part of the risk and reward for investing in emerging economies'.

SingTel, she said, had also benefited from foreign currency movements, especially the appreciating Australian dollar and Indian rupee. The company, she quickly added, did not engage in speculative foreign exchange-related activities.

On the Singapore front, its broadband, fixed-line and mobile phone mio plan bundle now has 42,000 subscribers, up 44 per cent from a quarter ago.

The company also, for the first time, gave a glimpse of how its foray into pay TV has performed so far.

The mio TV service, an optional paid add-on to the mio package, has secured 10,000 subscribers since its launch over two months ago. It 'has a lot of momentum' although it is not expected to make a significant contribution to SingTel's revenue any time soon, said SingTel chief executive officer for Singapore, Mr Allen Lew.

He declined to say how well mio TV is expected to do in future.

The company, said Ms Chua, was on track for achieving its earlier forecast of 'over 5 per cent' growth in earnings for this financial year.

SingTel shares rose four cents to close at $3.96 yesterday, on 34.9 million shares traded.

chuahh@sph.com.sg