Singapore Telecommunications Ltd.’s shares fell the most in more than a month after Southeast Asia’s biggest phone company forecast annual sales may drop for the first time in 13 years on declining Australian revenue.
The carrier declined as much as 1.3 percent, the most since Oct. 11, to S$3.15 and changed hands at S$3.16 as of 9:41 a.m. in Singapore trading. The shares have gained 2.3 percent this year, compared with a 13 percent advance for the Straits Times Index.
Revenue will fall by a “low single-digit level” in the 12 months ending March, compared with a previous forecast for an increase, the Singapore-based company known as SingTel said in a statement today. The company also reported second-quarter net income that missed analysts’ estimates as competition with Telstra Corp. and a venture of Vodafone Plc and Hutchison Whampoa Ltd. in Australia crimped growth at Optus, SingTel’s biggest unit by sales.
“The cut in sales forecast was a little bit of a surprise,” said Carey Wong, an analyst at OCBC Investment Research said in Singapore. “It will probably be flat growth for the rest of the year. I don’t think we’re going to see a sharp slowdown as telco business is basically very stable.”
A recovery in revenue in Singapore may start when more consumers adopt the so-called Long Term Evolution technology, which permits faster browsing of the Internet, he said.
Net income fell 1.6 percent to S$868 million ($710 million) in the July-September quarter, missing the S$953 million average of three estimates compiled by Bloomberg.
SingTel’s annual revenue last had a year-on-year decline in the 12 months ended March 2000, according to data compiled by Bloomberg. The company’s annual sales have beaten analyst estimates in each of the past five years.
“The group revenue is really sort of diluted by the impact of what’s happening in Australia,” Chief Financial Officer Jeann Low told reporters at a press conference. “The Singapore revenue-growth continues to be strong.”
The Singapore dollar’s appreciation against the Indonesian rupiah and the Thai Baht cut the value of earnings from affiliates. Bharti Airtel Ltd., the Indian phone operator part owned by SingTel, last week reported a 30 percent drop in profit in the quarter on higher costs in the world’s second-largest phone market.
“A downside for Singtel is some of its associates -- some of their results have been disappointing, like Bharti’s,” Kelvin Goh, an analyst at CIMB Securities Sdn in Kuala Lumpur, said before the announcement.
The company affirmed its forecast for “stable” full-year earnings before interest, tax, depreciation and amortization.
Second-quarter Ebitda at Optus, Australia’s second-largest phone company, was “stable” at A$560 million ($585 million) while revenue dropped 4 percent amid competition from larger Telstra Corp.
Ebitda from Singapore, where the former government agency has about 47 percent of the mobile-phone market, rose 2 percent to S$541 million. The division accounted for about half of the company’s full-year operating income last year.
SingTel owns all of its Singapore and Australian phone businesses in addition to minority stakes in six other mobile operators with 468 million customers in more than 20 countries in Asia and Africa.
The earnings contribution from regional associates rose 17 percent to S$549 million in the quarter on rising sales in Indonesia and Thailand, the company said. In constant currency terms, profit rose 26 percent, it said.
Bharti, India’s largest mobile-phone operator, on Nov. 7 reported a drop in profit as rising network costs and call-rate reductions in the world’s second-largest mobile-phone wireless market squeezed margins.
SingTel also announced paying an interim dividend of 6.8 Singapore cents a share.