SINGAPORE Telecommunications, the largest telephone company in Southeast Asia, said on Wednesday that profit fell 12 per cent in the July-September period as a strengthening local currency hurt the value of earnings from its units abroad.

The company, also known as SingTel, said in a statement that its net income for its fiscal second quarter fell to S$868 million, down from S$988 million a year earlier.

Sales rose 5.3 per cent to S$3.9 billion.

'Our expansion in the region subjects us to the volatility of the regional currencies,' SingTel Group Chief Executive Chua Sock Koong said.

'A stronger Singapore dollar reduces our mobile associates' earnings.'

SingTel's stakes in regional operators such as India's Bharti Airtel, Indonesia's PT Telkomsel, the Philippines' Globe Telecom, Pakistan's Warid Telecom , Pacific Bangladesh Telecom and Thailand's Advanced Info Service PCL account for more than half of the company's profits.

The company also warned that the global economic slowdown will undermine profits going forward.

'The current global financial crisis is unprecedented and the negative impact on businesses will be inevitable,' Mr Chua said. -- AP