Tags:SingTel | China Mobile | MTN

Singapore Telecommunications Ltd., Southeast Asia''s largest telephone company, said fourth-quarter profit climbed 11 percent, beating analysts'' estimates, on gains in its Indian unit.

Net income rose to S$1.09 billion ($794 million), or 6.83 Singapore cents a share, in the three months ended March 31, from S$989.4 million, or 6.2 cents, a year earlier, the company, known as SingTel, said today. Analysts predicted S$940.5 million, based on the median of 13 estimates compiled by Bloomberg.

Chief Executive Officer Chua Sock Koong marks her first year at the helm with the profit gain and a plan to expand growth by investing in emerging markets such as Africa and the Middle East. Chua faces the challenge of boosting earnings amid price cutting, currency fluctuations, and competition for regional assets from companies such as China Mobile Communications Corp.

``It''s been so far, so good,'''' said Christopher Wong, who helps manage $40 billion in assets, including SingTel shares, at Aberdeen Asset Management in Singapore. ``It''s still early days now to judge her.''''

SingTel advanced 0.5 percent to S$3.77 as of 9:20 a.m. on the Singapore stock exchange. The shares have climbed 15 percent since Chua was appointed April 1 last year, beating the 1.5 percent gain for the benchmark Straits Times Index.

Africa, Middle East

SingTel said it ``continues to explore opportunities in adjacent markets -- Central Asia, the Middle East and Africa.''''

New Delhi-based Bharti Airtel Ltd., 30.5 percent owned by SingTel, and MTN, the biggest wireless-phone operator in Africa, have said they are in exploratory talks. The Indian company yesterday reiterated it hasn''t placed a bid for MTN and the discussions might not lead to a transaction.

SingTel''s Chua said today it takes an ``active role'''' in major spending decisions at units, without specifying whether the company will join Bharti in any offer. The company hasn''t lined up financing for a possible bid, Chua said.

``MTN is the key to the entire African continent,'''' said Bruno Lippens, who helps manage $6 billion in telecommunication stocks, including SingTel, at Pictet & Cie in Geneva. ``Africa is the last big part of this planet where mobile telephony is still in its childhood.''''

SingTel said it will increase its dividend payout to 45 percent to 60 percent of earnings excluding one-time items, from a previous target of 40 percent to 50 percent.

The company plans to pay a final dividend of 6.9 Singapore cents, taking the total to 12.5 cents for the year. SingTel paid out 20.5 cents last fiscal year.

Serious Pursuit

The lower dividend is disappointing but signals ``SingTel is now in serious pursuit for MTN,'''' Khoo Chen Hsung, an analyst at CIMB-GK Research Pte. Ltd. with a ``neutral'''' rating on the Singapore operator, wrote in a report.

SingTel, which gets 70 percent of profit excluding one-time items from overseas, said fourth-quarter sales rose 11 percent to S$3.76 billion.

Bharti led the 18 percent gain in pretax profit from SingTel''s six Asian mobile units to S$630 million. The company, India''s largest mobile-phone operator, reported on April 25 fiscal fourth-quarter profit rose 37 percent to 18.5 billion rupees ($438 million), beating analysts'' estimates.

Bharti also sold shares in its infrastructure division, leading to a one-time gain of S$153 million for SingTel during the quarter.

SingTel said projected slower growth in economies including Australia, Singapore and elsewhere in Asia and uncertainties in financial markets have made the outlook ``more cautious.''''

Regional Growth

Earnings from regional mobile operations will rise at a slower ``double-digit'''' pace in the current 12-month period than in the past two years, hurt by competition in Indonesia and losses from SingTel''s Pakistan unit, according to the statement.

PT Telekomunikasi Selular in April slashed prices on calls made to rival networks by as much as 51 percent as competitors also reduced charges. Bharti''s fee cuts have helped the company gain more users than closest rival Reliance Communications Ltd.

Fourth-quarter earnings at SingTel Optus Pty rose 6.6 percent to A$165 million ($155 million), while sales climbed 4.5 percent to A$1.94 billion. SingTel said a stronger Australian dollar boosted the company''s profit by S$12 million.

Revenue at Sydney-based Optus will probably increase at a ``single-digit'''' pace this year, SingTel said.

In Singapore, earnings before interest, taxes, depreciation and amortization climbed 0.8 percent to S$469 million and sales gained 12 percent.

The company''s full-year profit rose 4.8 percent to S$3.96 billion, while sales increased 11 percent to a record S$14.84 billion.




Source:Bloomberg