Singapore Telecommunications Ltd. (ST), Southeast Asia’s biggest phone company, posted second-quarter profit that beat analysts’ estimates as strong domestic sales offset the negative impact of a rising local currency.
Underlying earnings after tax, which exclude one-time items, rose to S$884 million ($709 million) in the three months ended Sept. 30 from S$886 million a year earlier, SingTel, as the Singapore-based company is known, said in a statement today. That compares with the S$862 million median estimate of four analysts surveyed by Bloomberg News.
SingTel is boosting spending on acquisitions and adding digital businesses such as mobile advertising to limit reliance on its biggest markets, Singapore and Australia, where growth is slowing. The company is expanding in faster-growing Asian markets, including increasing its stake in Bharti Airtel Ltd. (BHARTI), India’s biggest wireless carrier.
“In the developing markets where our regional mobile associates operate, millions of customers are experiencing the internet for the first time via their mobile phones,” Chief Executive Officer Chua Sock Koong said in the statement. “Our strong operating performance was impacted by the strengthening of the Singapore Dollar.”
Net income in the quarter rose to S$870 million from S$868 million a year earlier, SingTel said. Sales fell 8.9 percent to S$4.16 billion. The company will pay an interim dividend of 6.8 Singapore cents a share.
The company maintained its full-year forecast. SingTel previously projected a “mid-single digit” decline in group revenue and a “low-single digit” drop in earnings before interest, tax, depreciation and amortization.
SingTel shares gained 0.5 percent to S$3.78 as of 11:11 a.m. in Singapore. The stock has gained 15 percent this year, compared with a benchmark Straits Times Index that has added 0.8 percent. Shares in SingTel’s Australian listing rose 0.6 percent to A$3.24 in Sydney.
Revenue from its mobile business in Singapore rose 7.3 percent percent to S$516 million amid a 6.5 percent increase in subscriber numbers, the company said.
Second-quarter Ebitda at Optus, Australia’s second-largest phone company, rose 3.2 percent to S$748 million.
The post-tax profit contribution from regional associates dropped 12 percent percent to S$354 million in the quarter as the Indonesian Rupiah and Indian Rupee slumped against the Singapore dollar, the company said. About 16 percent of the company’s earnings are denominated in foreign currencies, Chua said.
SingTel owns all of its Singapore and Australian phone businesses in addition to minority stakes in other mobile operators, including Bharti Airtel, Indonesia’s PT Telekomunikasi (TLKM) Selular and Globe Telecom Inc. (GLO) in the Philippines.
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