Singtel's Q4 profit up despite drag from Indian unit

A price war in India dragged Airtel's pre-tax profits down 51 per cent year on year to $90 million.
A price war in India dragged Airtel's pre-tax profits down 51 per cent year on year to $90 million.PHOTO: AGENCE FRANCE-PRESSE

Singtel's fourth-quarter net profit rose 1.8 per cent to $963.3 million, thanks to stronger growth in the Singapore and Australia consumer businesses, and Telkomsel in Indonesia.

The bottom line could have been even stronger but for poorer takings from Airtel India.

Operating revenue in the three months ended March 31 was $4.3 billion, a rise of 5.2 per cent from a year earlier, led by broadband services growth in Australia and enterprise ICT (information and communications technology) services.

Singtel said that excluding Airtel's drag on earnings, underlying net profit would have risen 7 per cent. A price war in India dragged Airtel's pre-tax profits down 51 per cent year on year to $90 million, even as business picked up in Africa.

Overall, Singtel's pre-tax profits from regional associates fell 6 per cent to $658 million, owing mainly to Airtel's weaker earnings.

However, Singtel group chief executive Chua Sock Koong told a media briefing yesterday: "(Indian rival Reliance) Jio has started charging from April, so Airtel will be in a position to take on competition in a more regular fashion."

Ms Chua added that Singtel's Singapore consumer business had outperformed the market, with revenue growing 1 per cent to $589 million, in line with growth in mobile data, broadband, TV and equipment sales.

  • AT A GLANCE

    OPERATING REVENUE: $4.3 billion (+5.2 per cent)

    NET PROFIT: $963.3 million (+1.8 per cent)

    FINAL DIVIDEND PER SHARE: 10.7 cents (Unchanged)

Fourth-quarter earnings per share was 5.9 cents, down from 5.94 cents a year ago. For the full year, earnings per share was 23.96 cents, down from 24.29 cents a year ago. Net asset value per share was $1.73 as at March 31, up from $1.57 a year earlier.

Singtel has proposed a final one-tier exempt ordinary dividend of 10.7 cents per share, payable in August. Together with the interim dividend of 6.8 cents paid in January, total ordinary dividends was unchanged from the year before.

Singtel met its guidance for the full year ended March 31. Net profit held stable at $3.85 billion, owing to strong core businesses, higher associate earnings and lower tax expenses.

In fact, underlying net profit had risen, although the bottom line was impacted as the group took a $42.4 million share of Singapore Post's impairment charges.

Full-year revenue slipped a little, from $16.96 billion to $16.71 billion.

This year, Singtel is expecting to deliver "mid-single digit" revenue growth, although Singapore mobile communications revenue is poised for a "low single digit" decline.

This is due to a much faster decline in voice services in the past year, as more locals switched to alternative apps to make phone calls, said Mr Yuen Kuan Moon, Singtel Consumer Singapore's chief executive. "The trend will continue to accelerate in the coming one to two years," he said.

Singtel reaffirmed that the planned initial public offering (IPO) of its fibre broadband unit, NetLink Trust, "is progressing well in this financial year". NetLink Trust is reportedly targeting to complete the IPO by July.

The counter rose 1 cent to $3.76 yesterday after earnings were announced.

A version of this article appeared in the print edition of The Straits Times on May 19, 2017, with the headline 'Singtel's Q4 profit up despite drag from Indian unit'. Print Edition | Subscribe