SingTel Beats Estimates on Gains in Singapore, Indonesian Unit

Feb. 9 (Bloomberg) -- Singapore Telecommunications Ltd., Southeast Asia’s largest phone company, posted profit and sales that beat analysts’ estimates after gaining mobile customers at home and in Indonesia.

Net income rose 24 percent to S$990.7 million ($696 million) in the three months ended Dec. 31, the Singapore-based company said today. SingTel was projected to post profit of S$948 million, according to the median of three analyst estimates compiled by Bloomberg.

Customers attracted by music services and products such as Apple Inc. iPhones helped drive up Singapore mobile revenue almost 9 percent as SingTel’s Internet television unit posted record subscriber gains. Income from PT Telekomunikasi Selular returned to growth on user additions and cost cuts as currency moves stoked overseas earnings converted into Singapore dollars.

“The impressive part is that Singapore mobile was up 9 percent and it looks like they are taking a bit in terms of market share,” said Theo Maas, who owns SingTel as part of the $4.5 billion in assets he manages at Fortis Investment Partners Pty. in Sydney. “Indonesia is well on track to stabilize. The quarterly contribution of Telkomsel in Indonesia has made a complete rebound.”

Third-quarter sales increased 20 percent to S$4.45 billion, bringing the nine-month total to S$12.4 billion.

The company affirmed its forecast for full-year Australian and Singapore revenue and earnings before interest, taxes, depreciation and amortization, or Ebitda, to grow at a “low single-digit level.”

SingTel rose 2 percent to S$3.01 as of the 12:30 p.m. break in Singapore trading. The stock has lost 3.2 percent this year after a 22 percent gain in 2009.

Singapore Market

Ebitda from Singapore rose 3.4 percent to S$580 million and sales gained 1.5 percent. The phone operator is adding ESPN programs and Barclays Premier League soccer games to mio TV, its Internet-based pay television service, as part of an expansion in multimedia.

Subscriber numbers at mio TV increased 29,000, a record quarterly gain, for a total of 155,000, while overall mobile users in the city state rose 8.1 percent to 3.2 million, SingTel said. The company’s market share was 46.2 percent in the third quarter, unchanged from three months earlier, the carrier said.

Pretax earnings from SingTel’s regional associates climbed 21 percent to S$560 million on rebounding Indonesian sales.

Growth in Indonesia

SingTel’s share of earnings from unlisted Telkomsel, as the Indonesian business in which it owns about a 35 percent stake is known, gained 53 percent to S$238 million. Third-quarter pretax profit from Indonesia fell 32 percent a year earlier.

Telkomsel, Indonesia’s largest mobile-phone operator, increased its customer numbers 25 percent to 81.6 million and posted a 15 percent rise in revenue amid “continued cost management,” according to a SingTel statement. The result was also helped by a 6 percent gain by the Indonesian rupiah against the Singapore dollar, the company said.

The Indonesian company, with about half the market, is targeting a further 15 million subscribers in the world’s fourth-most populous country as competition continues among the nation’s 11 operators, Telkomsel President Director Sarwoto Atmosutarno said in an interview last month.

Ebitda at the Singapore carrier’s wholly owned Australian unit, Sydney-based SingTel Optus Pty., rose 3.6 percent to A$529 million ($456 million) as increased mobile-phone revenue limited the impact of falling demand for fixed-line services.

Optus Stake

In Singapore dollars, Optus earnings rose 32 percent, helped by the Australian dollar’s 27 percent rise against its Singapore counterpart, the company said.

SingTel may consider selling a 25 percent stake in Optus to raise as much as A$4 billion, the Wall Street Journal reported Jan. 13, citing unidentified people.

SingTel hasn’t made a decision about selling a stake in Optus and the carrier’s focus remains in Asia, Chief Executive Officer Chua Sock Koong told reporters in Singapore today. The company is also looking at investment opportunities in Africa and the Middle East, she said.

“This is a good rather than great performance, with Optus only slightly outgrowing the industry,” Nathan Burley, an analyst at market researcher Ovum, said in e-mailed comments today.

23% More Subscribers

At the end of the quarter SingTel had 285 million mobile customers, up 23 percent from a year earlier. In addition to its wholly owned units in Australia and Singapore, it has stakes in operators in India, Pakistan, Bangladesh, Thailand and the Philippines as well as Indonesia.

Earnings from Bharti Airtel Ltd., in which SingTel holds almost a one-third stake, rose 4.6 percent to S$235 million. India’s biggest wireless phone company increased its mobile- subscriber base by 39 percent to 118.9 million compared to a year earlier, SingTel said today.

The earnings contribution from Advanced Info Service Pcl, Thailand’s biggest mobile-phone company, dropped 12.2 percent to S$52 million.

Globe Telecom Inc., its Philippine unit, posted a 5.7 percent decline in profit to S$54 million, SingTel said.

-- With assistance from Regina Tan in Singapore. Editors: Jonathan Annells, Young-Sam Cho.

To contact the reporters on this story: Robert Fenner in Melbourne rfenner@bloomberg.net