SINGAPORE--Southeast Asia's largest telco SingTel, has posted a first quarter net profit of S$945 million (US$758.8 million)--a 3.2 percent rise from a year ago. This was lifted by an improved showing from its associates in emerging markets and an exceptional gain from a divestment.
In its results released Tuesday, SingTel announced that group revenue fell 1.6 percent to S$4.53 billion (US$3.6 billion) for the three months ended June. In the same period, it saw underlying profit, which excludes one-time gains, drop 2.6 percent to S$850 million (US$681.9 million).
The net exceptional gains for the quarter mainly comprised a S$119 million gain (US$95 million) on the disposal of investment in Far EasTone Telecommunications, said Chua Sock Koong, SingTel group CEO, at a media briefing the same day.
This results are in contrast with the earlier 30 percent rise in fourth quarter net profit at S$1.29 billion (US$1.03 billion), on the back of a 3 percent rise in revenue for the period ended March 2012.
Singapore, regional associates offset Australia slowdown
SingTel's earnings were boosted by its domestic business where revenue rose 7.5 percent to S$1.67 billion (US$1.33 billion), with strong contribution from its engineering unit, NCS.
Earnings from mobile communications grew 1.5 percent on customer growth, despite lower postpaid average revenue per user (ARPU) which dropped 8 percent to S$80 (US$64.25). This was partly dragged down by a higher take up of data-only SIM cards--which are less profitable, noted Chua.
Regional associates such as Indonesia's Telkomsel and Thailand's AIS helped boost earnings with strong results, "driven by strong customer and data growth amid stable market conditions", said the group CEO. In the Philippines, Globe Telecom's service revenue rose to a quarterly record high on sustained growth across both mobile and broadband segments, she added.
However, Australian unit Optus’ had a weaker showing, with revenue down 3.2 percent to A$2.24 billion (US$2.35 billion) due to mobile termination rate cuts, lower equipment sales and service credits associated with device repayment plans, said Chua. She added this was worsened by a weaker currency.
Expanding reach with new structure
The three months also marks the first quarter under the telco's new corporate structure which took effect Apr. 1. The reorganization had split the regional business into consumer and enterprise segments, steering away from a geographical format.
"The new organisational structure has settled down well. Our new business units will extend our customer proposition into adjacent industries, new customer segments and geographical markets," said Chua.
The group CEO noted that the company was still on the lookout for acquisitions, especially in key areas for ICT business and digital content-related products and services. However, Chua added that "we haven't seen many opportunities" available in emerging markets so far.
The telco has been on a spree of acquisitions in the first half of the year, most recently snapping up restaurant review portal Hungrygowhere for S$12 million (US$9.4 million) in May, and Australian counterpart Eatability for A$6 million (US$6.3 million) in July through Optus. It has also made a push into mobile advertising company, with the acquisition of U.S.-based Amobee for US$321 million in March, and Sillicon Valley startup, AdJitsu, for an undisclosed sum in May.