SingTel second quarter net profit down 6.7%

SINGAPORE: Singapore Telecommunications (SingTel) on Thursday reported a 6.7 per cent slide in profit during the second quarter after it was dragged down by an Indian associate's losses.

Southeast Asia's largest telecoms firm by revenue said net profit in the July-September quarter totalled 892 million Singapore dollars (USD 694 million) compared with 956 million dollars during the same period last year.

SingTel said revenue for the quarter increased 8.1 per cent on-year to 4.44 billion dollars, from 4.1 billion dollars. The company said profit was hit by the inclusion of losses from African operations acquired by its Indian ally Bharti Airtel.

"The group's earnings were impacted by the inclusion of the first full quarter of losses from the newly-acquired Africa operations by Bharti (Bharti Africa) and the related acquisition financing cost," SingTel said in a statement.

SingTel's share of the loss suffered by Bharti's expansion in Africa amounted to 18 million dollars. Together with related acquisition financing costs totalling 19 million dollars, Bharti Africa dragged down SingTel's net profit by 3.7 per cent.

As well as Bharti, SingTel also has stakes in Indonesia's Telkomsel, Globe Telecom in the Philippines, Thailand's Advanced Info Service (AIS), Warid of Pakistan, Pacific Bangladesh Telecom and various regional mobile associates.

"The group continues to generate strong revenue growth and cash flows from Singapore and Australia," said SingTel chief executive officer Chua Sock Koong. "We are committed to achieving an optimal capital structure and have raised our dividend payout... while maintaining financial flexibility for our growth initiatives," she said.

SingTel and its associates had more than 367 million mobile users as of the end of September, up 35 per cent from a year ago thanks to strong contributions from Bharti, Telkomsel, Globe and AIS.

SingTel's Australian subsidiary Optus also posted a solid showing, expanding its mobile base by an annual eight per cent to 8.9 million at the end of September, the company said in a statement. At home, SingTel increased its share in the highly mature market by two percent to 3.2 million users.