SingTel profit up 3.5% in Q4, but falls short of analysts’ estimates

15 May 2014

Singapore Telecommunications (SingTel), Southeast Asia’s biggest phone company, posted a 3.5% increase in net income to SGD898.3 million (USD718 million) for its fiscal fourth quarter ending 31 March 2014, but fell short of analysts’ estimates for profit of SGD904 million, as falling sales at its Australian business and the impact of weaker currencies from other regional operations hit its bottom line. In its filing to the local stock exchange, SingTel – which owns partial stakes in India’s Bharti Airtel, Indonesia’s Telkomsel, Thailand’s Advanced Info Service, Philippines’ Globe Telecom and Pacific Bangladesh Telecom – noted that the Australian dollar (AUD), Indonesian rupiah (IDR) and the Indian rupee (INR) weakened between 11% and 20% against the Singapore currency during the quarter, adversely affecting profitability. Fourth quarter revenue was down 7.9% to SGD4.13 billion, ‘as the business environment remained cautious and pricing competition was keen,’ SingTel said.

For the full year to 31 March 2014, net profit increased 4.1% to SGD3.65 billion, while group revenue dipped 7.3% to SGD16.85 billion. SingTel’s aggregate mobile customer base totalled 514 million as at end-March, up 10% from a year earlier.

SingTel is trying to reinvigorate its Australian phone business Optus – its single biggest unit – where sales have been in decline in recent quarters. However, local industry watchers agree that SingTel is losing ground in Australia where Q4 sales fell 4.9% year-on-year to AUD2.07 billion (USD1.94 billion). In a bid to stop the rot, SingTel Optus plans to invest AUD1.2 billion in infrastructure this year, its biggest single annual CAPEX spend in more than a decade, although the unit may also look to cut more than 200 jobs in Australia to cut costs.

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