SingTel 4Q Net Down 47%; Fiscal Year Beats Expectations

SINGAPORE -(Dow Jones)- Singapore Telecommunications Ltd. (T48.SG) Thursday reported a 47% fall in fiscal fourth-quarter net profit from a year ago when exceptional items inflated earnings.

It also posted a smaller-than-expected 27% drop in full-year earnings as growth overseas continued to offset greater competition at home and in Australia, where it owns the country's No. 2 mobile phone company.

Net profit in the January-March quarter amounted to S$1.04 billion, compared with S$1.96 billion a year earlier.

However, underlying net profit, which excludes income from the sale of the company's stake in Belgian operator Belgacom SA (BELG.BT) booked in the year-ago quarter and other items, rose nearly 40% to S$881 million. Underlying net profit excludes goodwill, exceptional items and Belgacom's net contribution among other items.

For the full year, Southeast Asia's largest telecommunications company said net profit fell to S$3.27 billion from S$4.49 billion a year ago. Analysts polled by Thomson Financial had expected a full-year net profit of S$2.87 billion.

"Our financial results for the year exceeded the targets we set a year ago," said Chief Executive Lee Hsien Yang at a media briefing.

Fourth-quarter revenue rose 2.6% to S$3.25 billion from S$3.16 billion a year ago. Revenue for the year rose 5.2% to S$12.62 billion from S$12 billion.

SingTel rewarded shareholders with a higher dividend, and said it expects underlying earnings to grow at a double digit rate in the medium-term. Some of that growth will come from further overseas expansion.

While growth in Singapore remained flat and lower in Australia underscoring intense competition in the two developed markets, SingTel's operations in emerging markets continued to perform well.

SingTel has spent about S$20 billion in recent years to bolster its regional presence and is looking to strengthen its position by bidding for a controlling stake in Pakistan Telecommunications Ltd.

SingTel shareholders will get a final dividend of eight Singapore cents per share and an additional five cents as special dividend. Singapore's most widely held public company last year rewarded shareholders a 6.4 cents per share final dividend.

Singapore Business Remains Flat

SingTel said its data and internet business expanded in Singapore, helping offset lower revenue from mobile communications and local and long-distance services.

Singapore operations generated S$4.05 billion in revenue in the year, virtually flat from a year ago - and are expected to remain flat during the current year as the company fights off rivals MobileOne Ltd. and StarHub Ltd.

Revenue from data and internet services in the fourth quarter rose 7.1% to S$299 million from S$279 million a year ago, partially because of growth in the broadband market.

SingTel said it had 299,000 broadband lines, 16% higher from a year ago. Still, SingTel's broadband market share dropped to 56%, five points lower than a year ago.

SingTel also lost ground in the highly competitive mobile phone market where its market share fell to 39% from 42% a year ago, despite a rise in subscribers to 3.99 million from 3.58 million a year ago, and attempts to hold its share above 40%. Average monthly revenue per subscriber in the quarter also fell to S$54 from S$57 a year ago.

Optus Loses Market Share, Regional Ops Grow

Revenue from SingTel's wholly owned Optus unit in Australia rose 4.1% to A$1.72 billion from A$1.65 billion in the quarter a year ago. But revenue growth was sharply lower than the 7.7% growth in the financial third quarter.

Optus, the No. 2 mobile services provider after Telstra Corp. (TLS), controlled a 33% market share as of March 31, down two points from a year ago underscoring rising competition.

Optus had 5.9 million mobile phone subscribers, down from 6.2 million in the third quarter, but higher than the 5.6 million a year ago. Average monthly revenue per subscriber fell to A$46 from A$50 a year ago.

"Optus is facing a changing market. The introduction of mobile caps, the declining usage of fixed lines and unfavorable regulatory outcomes, including the reduction of mobile termination rates, impacted our top line," said Optus Chief Executive Paul O'Sullivan.

Regional operations continued to boost SingTel's bottomline. Excluding Belgacom, its regional associates in India, Indonesia, the Philippines and Thailand contributed 31% full-year underlying net profit.

SingTel has stakes in Thailand's Advanced Info Service PCL (ADVANC.TH), India's Bharti Tele-Ventures Ltd. (532454.BY), the Philippines' Globe Telecom Inc. (GLO.PH) and Indonesia's PT Telekomunikasi Selular.

Mobile subscriber base for its four associates grew 42% to 57 million.

-By Jessica Tan, Dow Jones Newswires; 65/6415-4155;

jessica.tan@dowjones.com

-Edited by Hasan Jafri and Jenny Paris

(END) Dow Jones Newswires"

Posted to the site on 5th May 2005