Operating

SingTel Q4 net profit surges 30%

Updated:2012/5/10 17:21

Singapore Telecommunications Ltd., the island nation's biggest firm by market capitalization, Thursday reported a 30% surge in its fiscal fourth-quarter net profit as contributions from some of its regional mobile associates rose and it logged currency-translation gains from the strength of the Australian dollar.

Net profit for the quarter ended March 31 was S$1.29 billion (US$1.03 billion) compared with S$991.7 million a year earlier, SingTel said in a statement to Singapore Exchange. Five analysts polled by Dow Jones Newswires had tipped net profit to be S$1.04 billion. Operating revenue rose 3% to S$4.78 billion.

The income gain--net profit crossed the billion Singapore dollar mark for the first time in two years--will give Group Chief Executive Chua Sock Koong greater confidence to explore growth through acquisitions as the local market is almost saturated. The company generated free cash flows totaling S$3.46 billion in the last fiscal year.

SingTel, which is fairly picky about investments, said it will continue to explore acquisition opportunities after it announced a US$321 million acquisition of Amobee, a U.S.-based mobile advertising solutions provider in March.

"We continue to review opportunities to increase our stakes in the associates and may make strategic investments to gain important capabilities, drive growth in adjacent industries and extend the group's customer relationships," Chua said in the statement.

The company expects group revenue to rise in low-single digits in the new fiscal year that started in April and said it will invest S$950 million in Singapore to build up its new generation networks.

SingTel, which is 55% owned by Singapore's state investment firm Temasek Holdings, last month sold its entire 3.98% equity stake in Taiwan's Far EasTone Telecommunications Co., Ltd. for S$339 million. The company said it will recognize a gain of approximately S$118 million in the first quarter from the transaction.

Pre-tax profit from SingTel's regional mobile associates rose 6.4% on year to S$510 million as contributions from its Thailand and Indonesian partners were higher, despite the drag from its Indian associate Bharti Airtel Ltd. that was made worse by the Indian rupee's 12% loss against the Singapore dollar in the quarter. Bharti Airtel's contribution from its south Asia operations was down 24.7% at S$148 million.

Telkomsel's contribution rose 20.4% to S$229 million while that from Thailand's Advanced Info was 52% higher at S$111 million. Globe, Warid and Pacific Bangladesh, however, contributed lesser.

SingTel, Southeast Asia's largest telecommunications firm by revenue, holds significant stakes in six foreign mobile operators: Bharti Airtel Ltd., Indonesia's Telkomsel, Advanced Info Service PCL in Thailand, Pakistan's Warid Telecom, the Philippines's Globe Telecom Inc. and Pacific Bangladesh Telecom.

Operating revenue from SingTel's Australian unit Optus was down 1.1% to A$2.30 billion in the fourth quarter, while net profit was up 2.1% at A$267 million. In local dollar terms, however, a 4% on year rise in the Australian dollar led to a 2.7% on year rise in revenue to S$3.06 billion.

Group underlying net profit, which strips away exceptional items, rose a more modest 2.5% to S$1.02 billion, according to the statement. SingTel will pay a final ordinary dividend of 9 Singapore cents a share.

For the full fiscal year that ended March 31, SingTel said net profit was 4.3% higher at S$3.99 billion while revenue grew 4.2% to S$18.83 billion.

 Source:totaltele
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