Singtel Q3 profit up 2% on core business, strong cyber security demand

A Singtel logo is pictured at their head office in Singapore on Feb 11, 2016.
A Singtel logo is pictured at their head office in Singapore on Feb 11, 2016. PHOTO: REUTERS

SINGAPORE - Singapore Telecommunications (Singtel) reported on Thursday (Feb 9) a 2 per cent rise in net profit to S$972.8 million for the third quarter ended Dec 31, 2016, as it saw strong core business and higher contributions from regional mobile associates.

In the core business, ICT revenues grew, bolstered by contract wins by NCS and demand for cyber security services. It said higher consumer home services revenue in Singapore and growth in postpaid mobile customer numbers in Australia helped mitigate continued voice to data substitution and roaming revenue declines.

Operating revenue for the quarter declined 2 per cent to S$4.41 billion from a a year ago due to mandated cuts in Australian mobile termination rates.

Excluding this rate impact, revenue grew 3 per cent, while underlying net profit rose 4 per cent to S$994 million, Singtel said.

Earnings per share came in at 6.03 Singapore cents compared to 5.98 Singapore cents a year ago.

No new dividend was declared. An interim dividend of 6.8 Singapore cents per share for the current financial year ending March 31, 2017, was paid last month.

Ms Chua Sock Koong, Singtel Group CEO said, "We have managed to hold good ground against the backdrop of a slowing Singapore economy and more challenging business environment all around. Our ICT business, particularly cyber security, has held us in good stead.

"This quarter, we focused on building out our global network of security operation centres while increasing resources in sales and delivery to meet the growing demand for cyber security services. Our consumer business also did well, due primarily to ongoing cost management, the sub-license of Premier League content rights in Singapore and significant growth in branded postpaid mobile customers migrating to higher-tier plans in Australia."

Among the associates, strong performance from Telkomsel offset the impact of very intense competition in India, driving associates' pre-tax contributions up 2 per cent year on year to S$660 million, said Singtel.

However, Airtel's pre-tax profits fell 27 per cent, with the combined effects of intensifying competition from a new operator in India, higher spectrum amortisation and financing costs, further exacerbated by demonetisation, said Singtel.

In Thailand, AIS' earnings were affected by higher amortisation charges as well as higher costs incurred through the leasing of 2100Mhz spectrum and equipment from TOT. In the Philippines, Globe's earnings increased on stable revenues and tight cost management.

The group's customer base grew 2 per cent in the quarter to 640 million customers across the region, said Ms Chua.

Singtel said it has begun preparations for the public listing of its wholly-owned NetLink Trust (NLT) given its undertaking to the Infocomm Media Development Authority (IMDA) to divest its stake in NLT to less than 25 per cent before April 22, 2018.