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SINGAPORE Telecommunications, Southeast Asia's largest phone company, posted a 9.6 per cent rise in quarterly underlying profit on Tuesday, thanks to robust revenues at home and investments in emerging markets.
Singapore's largest listed firm looks set to enjoy solid earnings this year as it benefits from buoyant subscriber growth in markets like India and Indonesia, where handset usage remains low.
The state-controlled firm maintained its guidance for higher earnings before interest, tax, depreciation and amortisation (EBITDA) for its fiscal year ending in March.
'Revenue growth in both Singapore and Australia is running ahead of the company's guidance,' said Morgan Stanley analyst Navin Killa.
SingTel made underlying net profit before goodwill and exceptionals of S$931 million for the fiscal third quarter ended on Dec 31, compared with S$850 million a year earlier, and above an average forecast of S$918.8 million from a Reuters survey of five analysts.
Group operating revenue jumped 11 per cent to S$3.83 billion, thanks to higher domestic sales and the appreciation of the Australian dollar.
'We have a strong balance sheet with significant flexibility for further investment,' said Chief Executive Chua Sock Koong.
But Mrs Chua said SingTel had pulled out of a bid for Ghana Telecom.
SingTel shares rose 1.8 per cent to a high of S$3.93 -their best level in more than 2 weeks. The broader market fell 1.1 per cent.
Eyes acquisitions
Facing a domestic market of just 4.6 million people where virtually everyone owns a mobile phone, SingTel has spent S$18 billion in recent years buying stakes in mobile phone operators in high-growth Asian nations, and in the bigger Australian market.
It now derives about 75 per cent of revenues and two-thirds of pre-tax earnings from operations outside Singapore.
Optus, Australia's second-largest mobile operator and SingTel's single-biggest revenue and profit generator, posted a 5.9 per cent rise in quarterly underlying profit to A$143 million (S$183.4 million).
The unit, which holds a third of the mobile market, faces cut-throat price competition, ebbing subscriber growth and regulatory changes in a saturated domestic market, where more than eight in 10 people own a phone.
Besides Optus, SingTel also owns big stakes in six emerging market mobile operators, including 30.5 per cent in India's Bharti , 44.5 per cent in Globe Telecom in the Philippines, and 35 per cent in Indonesia's Telkomsel.
Most of these investments have shown phenomenal growth in wireless subscribers in recent years.
Excluding exceptionals, pre-tax earnings from the associates rose 30 per cent to S$656 million in the quarter, driven mainly by Telkomsel, Bharti and Globe.
Mrs Chua reiterated that SingTel's investment focus remains in Asia, though it was also learning about a number of new markets, such as Central Asia, Middle East and Africa.
She added current financial market turmoil could make valuations for telecoms assets cheaper.
Dropped bid for Ghana Telecom
SingTel also said on Tuesday it had dropped its bid for Africa's Ghana Telecom and its decision was the right one.
'We decided not to proceed due to issues arising from the process,' Mr Lim Chuan Poh, Chief Executive of SingTel's international operations, told a news briefing.
'Even if we had proceeded, they did not complete the process, so we did not waste our time... our decision not to proceed was the right one.' -- REUTERS
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