The absence of a one-off gain and new rules surrounding mobile phones in Australia took their toll on Singtel in the second quarter, it reported yesterday.
Net profit fell 5.6 per cent to $972 million, largely due to the boost in the bottom line enjoyed last year after Singtel reaped some gains when its India associate, Airtel, sold some assets.
Excluding exceptional items, underlying net profit held steady at $978 million on stronger contributions from Telkomsel in Indonesia and Airtel. Operating revenue in the three months to Sept 30 fell 2.3 per cent to $4.09 billion from a year earlier. It would have been higher if not for the impact of mandated cuts to mobile termination rates in Australia.
The group's consumer business revenue fell 7.7 per cent to $2.34 billion, led by an 11 per cent drop in consumer revenue from Australian subsidiary Optus as competition intensified in the mobile market.
Singtel expects mobile service revenue from Australia will fall by the "mid teens" in the 12 months to March 31 next year.
AT A GLANCE
REVENUE: $4.09 billion (-2.3%)
NET PROFIT: $972 million (-5.6%)
DIVIDEND: 6.8 cents per share (unchanged)
Singapore consumer revenue was 3 per cent lower at $576 million as equipment sales dipped due to the pending release of new models, the popularity of lower-priced Android handsets and SIM-only plans.
But Singapore mobile communications revenue was stable at $520 million as strong data growth offset a decline in voice. This will continue to be stable over the next six months, Singtel said.
The firm's share of pre-tax profits from regional mobile associates in the second quarter climbed 7 per cent to $679 million, despite a 19 per cent fall in earnings from Thailand's AIS on higher spectrum amortisation charges and network costs.
In October, Singtel's shareholders approved the purchase of more shares in AIS and Airtel.
Group chief executive Chua Sock Koong told a media briefing yesterday: "On an ongoing basis, we have been very consistent on what we want to do in the acquisitions space.
"In the case of the associates, if there are opportunities to further increase our stakes, on terms and conditions that we think are attractive to us, we'll be prepared to look at that.
"We continue to look at investments in the digital space to enhance our existing business and services."
The board has approved a dividend of 6.8 cents per share, representing a payout ratio of 56 per cent of underlying net profit in the six months to Sept 30.
The telco's second-quarter earnings per share was 6.10 cents, down from 6.46 cents a year ago, while net asset value per share was $1.57 as at Sept 30, unchanged from March 31.
Overall, Singtel expects revenue for the year ending next March 31 to decline by a low single digit and Ebitda (earnings before interest, taxes, debt, and amortisation) to be stable.
The counter closed two cents lower at $3.84 after earnings were posted yesterday.