Singtel Q1 net profit falls 23.1% on exceptional loss from Airtel
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The net exceptional loss came from associate Bharti Airtel as it recorded significant foreign exchange losses.
PHOTO: ST FILE
Zhao Yifan
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SINGAPORE – Singtel reported on Monday that its net profit for the first quarter ended June 30 of the 2024 fiscal year dropped 23.1 per cent to $483 million from $628 million in the corresponding year-ago period.
The drop was mainly attributed to a net exceptional loss of $88 million, compared with a net exceptional gain of $129 million observed in the first quarter of FY2023.
The net exceptional loss came from associate Bharti Airtel
There was also a fair value loss of $52 million from Airtel’s foreign currency convertible bonds, bringing Singtel’s total share of Airtel’s exceptional losses to $114 million.
Operating revenue dropped 2.7 per cent year on year to $3.5 billion from $3.6 billion.
Revenue was dragged down by a 9 per cent decline in the Australian dollar. Operating revenue from Optus, the Singtel-owned Australian telco,
In constant currency terms, operating revenue would have been up 2.5 per cent, led by higher revenues from the group’s growth engines: NCS, Singtel’s wholly owned information technology company, and Digital InfraCo, Singtel’s standalone infrastructure unit.
The group’s first quarter net finance expenses fell 54.3 per cent to $52 million from $114 million the year before.
This was due to a rise in interest income driven by higher interest rates, as well as Singtel’s increased holdings of fixed deposits and Singapore treasury bills after asset recycling in 2022.
The telco also ceased to be affected by the revaluation loss from a derivative, which drove up its finance expenses in the first quarter of FY2023.
Singtel’s underlying net profit rose 14.5 per cent to $571 million in the first quarter of FY2024 from $499 million in the year-ago period. This was despite “prevailing macroeconomic challenges and currency headwinds”, said Singtel group chief executive Yuen Kuan Moon.
“While we saw better performances and higher contributions from our regional associates as market dynamics improved, increased competition and continued declines in legacy services impacted our core telco business in Singapore and Australia.”
He said: “Going forward, we expect the integration of our core consumer and enterprise businesses which is under way in both Singapore and Australia, as the next step in our strategic reset, to optimise synergies, help deliver cost benefits and drive growth.”
Shares of Singtel closed flat at $2.34 on Monday. THE BUSINESS TIMES
