 Print Article
|
Group chief executive Chua Sock Koong told a results briefing yesterday that the 'unprecedented' global financial crisis will have a 'negative impact on businesses', including the telco.
Ms Chua said SingTel has 'implemented a hiring freeze and we're looking at discretionary expense items, how they can be better managed'.
The region's largest telco will also examine other measures like redeploying staff to do other roles, not replacing staff who quit, and adjusting its variable bonus payout for employees.
While Ms Chua did not rule out retrenchments, she said they would be a 'last resort'. SingTel, which employs over 11,000 people here, declined to say when it last laid off Singapore staff.
Last month, it said it would cut 115 jobs from its Australian unit Optus, which employed 10,700 people. Optus imposed a hiring freeze in June.
Its second quarter results mirror the gloomy mood. Net profits for the three months to Sept 30 fell 12.1 per cent to $868 million, from $988 million last year.
The decline was primarily due to subsidies for sales of the Apple iPhone 3G handset and foreign currency fluctuations that resulted in lower income from investments like India's Bharti Airtel and Indonesia's Telkomsel.
Revenue was up 5.3 per cent to $3.89 billion.
Earnings per share was 5.45 cents, down from 6.21 cents this time last year, while net asset value a share was $1.28, down from $1.32 as at March 31.
Its dividend of 5.6 cents is unchanged from a year ago.
SingTel's chief executive for overseas operations, Mr Lim Chuan Poh, told the briefing that while the economic climate is challenging, the telco's strong financial position puts it in 'a good position to look at opportunities'.
The downturn has made key firms in China and Vietnam keener on selling stakes - and the buy-in prices will be lower to boot, said Mr Lim. He declined to say what stage discussions are at with these companies.
SingTel has a $1.1 billion war-chest and is confident it will have no problems raising additional funds if needed to fund such investments, said group chief financial officer Jeann Low.
Discussions are also under way with Taiwan's High Tech Computer Corp (HTC) and technology giant Google to bring the HTC G1 - often called the 'Google' phone - here, said its chief executive for Singapore, Mr Allen Lew.
Mr Lew declined to say when the device will be on the shelves or if it would be an exclusive deal like the one SingTel has with Apple.
SingTel is keen on smart phones like the iPhone and G1 because users generally consume more mobile data and so generate more profits. SingTel's iPhone users, for instance, generate 1.5 times the revenue of non-iPhone users.
Analysts gave yesterday's results a mixed reception.
CIMB's Kelvin Goh, who had an 'underperform' rating and $2.37 price target on the stock, said SingTel's performance was 'weak across the board'.
But Macquarie Research had an 'outperform' rating and $2.88 price target.
The firm's 'core Singapore/Optus business is undervalued', and there was 'safety in a strong balance sheet and 5 per cent cash-backed dividend yield', it said.
SingTel shares rose 3 cents to close at $2.38 yesterday.
Read also:
BT profits up, to cut 10,000 jobs
Morgan Stanley cuts jobs
