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SingTel 'resilient' in Q1 2014/.15, despite net profit, revenue and EBITDA all falling

Mike Gee | Aug. 14, 2014
Net profit declined 17 percent to S$835 million (US$667 million).

Optus' parent company, Singapore Telecommunications Limited (SingTel), has labelled its Q1 2014/15 performance as "resilient" despite major investments to support business transformation and currency headwinds and drops in net profit, revenue and EBITDA.

Underlying net profit dipped 2 per cent to $S881 million for the quarter ending June 30, 2014. In constant currency terms, underlying net profit would have grown 5 per cent, SingTel said.

Net profit, impacted by exceptional items, declined 17 per cent to $835 million and would have been down 12 per cent in constant currency terms. In the same quarter last year, an exceptional gain of $S150 million was recognised from the dilution of the Group's stake in Airtel. This quarter's results included staff restructuring costs of $S 27 million and a $ S 17 million share of Airtel's exceptional loss for various disputes and provisions.

Revenue and EBITDA were down 3 per cent to $S4.15 billion and $S1.25 billion respectively, but the company again underscored they would have been stable in constant currency terms. Constant currency basis amounts are calculated using the average foreign currency exchange rates for the current period (quarter-to-date or year-to-date) and applied to each of the comparable periods. What this does is removes the effect of currency movements. While the constant currency number is useful for comparative purposes it is essentially fictitious and won't appear again. The bottom line is the 2 per cent dip to $S881 million.

The Singapore consumer business and regional mobile associates, namely Airtel and Globe, contributed strong growth. The Group's share of the regional mobile associates' pre-tax earnings grew 8 per cent to $S594 million. (In constant currency terms, this would have increased 20 per cent).

Airtel delivered a sharply improved quarter with strong growth in voice and data, and higher margins in India. The Group's share of Airtel's pre-tax earnings grew 68 per cent. In the Philippines, Globe's pre-tax earnings contribution was up 20 per cent.

The Group and its regional mobile associates also recorded strong customer growth in the quarter. As of June 30, 2014, the combined mobile customer base [the total number of mobile customers in SingTel, Optus and the regional mobile associates] grew 10 per cent to 525 million from a year ago.

SingTel Group CEO, Ms Chua Sock Koong, said, "This quarter, the Group reported strong operating results and increased free cash flow. Our regional mobile associates delivered a solid performance. Their markets are experiencing strong growth, spurred by improvements in 3G networks, handsets and content. We are collaborating with our associates to accelerate investments in networks, and launch new data and digital services.

"In Singapore and Australia, tiered data plans are gaining traction with customers and driving mobile data usage. At Optus, we saw encouraging sales momentum from the recently launched MyPlan Plus with customer take-up of both SIM-only and data share plans. In Singapore, we introduced the world's first 300 Mbps 4G service and the island's first voice over LTE service," Ms Chua said.

 

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