SingTel Profits Up - Revenues Hit by Currency Fluctuations

Singapore's SingTel has reported a quarterly 7.7% rise in net profits to S$945.4 million (US$654 million), boosted largely by profits from overseas wireless subsidiaries. In the first fiscal quarter ended 30 June 2009, both Singapore and Australia posted double-digit growth in revenue and improved EBITDA. However, as a result of the weaker Australian dollar against the Singapore dollar, the Group's revenue rose only 1.9% to S$3.85 billion (US$2.66 billion) from S$3.78 billion. The Group's revenue would have increased 12 percent if the Australian dollar had been stable from the corresponding quarter last year.

Earnings from the Group's regional mobile associates increased 12 per cent to S$624 million (US$431 million), driven by higher contributions from Indonesia's Telkomsel which reported improved earnings and mark-to-market gains on foreign currency liabilities.

Ms Chua Sock Koong, SingTel Group Chief Executive Officer, said: "The Group performed well and achieved earnings growth despite the uncertain economic environment and negative impact of the Australian dollar and regional currencies. This reflects the strength of our businesses and also recovery in the regional mobile associates' earnings. I am pleased to affirm our guidance that was given in May.

"The current operating environment remains a challenge. We will continue to monitor the macro environment and our cost management initiatives. The Group remains committed to investing for long-term growth and in staff development. We will also explore and monitor investment opportunities and will be disciplined when reviewing these opportunities."

Free cash flow improved to S$572 million (US$395 million) from S$553 million a year ago.

Mr Lim Chuan Poh, CEO International, said: "This quarter, higher contributions from our regional mobile associates, in particular, Telkomsel and Bharti, helped to drive the Group's earnings, despite the negative currency impact. The associates contributed 53 per cent to the Group's underlying net profit, up 3 percentage points from a year ago. In Indonesia, pressure on tariffs has eased and Telkomsel gained market share for the second consecutive quarter."

Posted to the site on 13th August 2009