SingTel dials up a strong result
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SingTel is Singapore's most valuable company.
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SINGAPORE (Reuters) -- Singapore Telecommunications has almost tripled its quarterly net profit, driven by strong Australian operations and growth in other overseas mobile units.
Southeast Asia's largest phone company posted third quarter results Thursday.
A bundle of one-off items, including a foreign exchange gain and sales of investments, helped inflate third-quarter earnings 189 percent from a year earlier.
SingTel, Singapore's most valuable company and 65 percent government-owned, earned S$854 million ($503.2 million) in the third quarter to December 31. That compared with S$296 million a year earlier and S$473 million in the September quarter.
SingTel, which is boosting its overseas business to compensate for a mature domestic market, said its Australian unit Optus increased profits nearly six-fold while emerging markets racked up a 68 percent gain in earnings.
More than two-thirds of SingTel's revenue and half of its pre-tax earnings are generated outside Singapore, with high-growth countries such as India and Thailand helping to cushion declining sales at home.
Analysts said exceptional items totalled S$243 million but that underlying profits of S$611 million were still impressive. The market had been expecting a S$531.2 million net profit, according to a Reuters poll of five analysts.
"SingTel's results blew all our estimates away," said Himanshu Chaturvedi, analyst with DBS Vickers Securities. "The company looks set for another good quarter in March -- it's just going from strength to strength."
SingTel's shares rose 1.4 percent to S$2.11 in early trade.
The company said on Monday its mobile subscribers had grown to 44.1 million by December 31, up eight percent from the previous quarter and 37 percent from a year earlier.
Operating revenue for the quarter rose 16 percent to S$3.02 billion.
"SingTel is well on track to meet its targets for the year," Chief Executive Lee Hsien Yang said in a statement. "We are confident of delivering double-digit earnings growth for the medium term."
SingTel has spent S$17 billion in the last four years buying firms in Asian nations with fewer cellphone users and in the bigger Australian market, as it diversifies away from a home market where four out of five people own a mobile phone.
Optus reported a net profit of A$126 million for the third quarter, compared with A$22 million a year earlier, as revenue rose 14 percent to A$1.66 billion.
"Optus is tracking well in terms of its full-year guidance," said Optus Chief Executive Chris Anderson. "There were revenue growth, margin expansion and increases in market share for all divisions."
SingTel's share of profits from associates -- Thailand's Advanced Info Service Plc (AIS), India's Bharti Tele-Ventures Ltd, the Philippines' Globe Telecom and Indonesia's Telkomsel -- rose to S$238 million, as mobile subscribers jumped 43 percent to 37.2 million.
Analysts said the one-off items included foreign exchange gains from the repayment of Australian dollar-denominated loans to Optus and the sale of partial stakes in Globe and Belgian's Belgacom.
Excluding its postal and directories business, sales in Singapore fell 8.4 percent to S$973 million, led by sluggish international telephone sales and weakness in its information technology and engineering division. Data and mobile revenues, however, were stable from the previous quarter.
Net debt rose to S$8.49 billion at the end of December from S$8.08 billion at the close of the previous quarter.
Free cash flow for the quarter stood at S$652 million, up 25 percent from a year earlier, reflecting Optus's improved financial position. The unit's free cash flow rose 47 percent to A$210 million.
SingTel's stock jumped nearly 60 percent in 2003, outperforming the broader Straits Times Index, which gained 32 percent.
Copyright 2004
Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
