Currency movements eat into SingTel’s Q1 profit

SINGAPORE — SingTel yesterday said its fiscal first-quarter net profit fell 17.4 per cent, affected by one-off items and adverse currency movements.

Net profit for the quarter ended June fell to S$834.6 million from S$1.01 billion last year, when the telco logged an exceptional gain of S$150 million from the dilution of its stake in its Indian associate Bharti Airtel.

The strength of the Singapore dollar had affected the value of income from its overseas affiliates, SingTel said. During the quarter, the Indonesian rupiah declined 19 per cent against the Singapore dollar, while the Australian dollar fell 5 per cent and the Indian rupee depreciated 7 per cent. In constant currency terms, its net profit would have declined by a narrower 12 per cent, SingTel said.

AirTel posted the biggest gain among its associates, with profit before tax up 68 per cent at S$191 million. Meanwhile, Thailand’s AIS fell 14 per cent to S$96 million and Indonesia’s Telkomsel Selular dropped 13 per cent to S$222 million.

“Our regional mobile associates delivered a solid performance. Their markets are experiencing strong growth, spurred by improvements in 3G networks, handsets and content,” said Ms Chua Sock Koong, SingTel Group chief executive officer.

However, SingTel acknowledged that Thailand did not fare as well, as the government is postponing the 4G rollout. Mr Allen Lew, CEO of Group Digital Life and chairman of the AIS executive committee, pegged it as a concern, but said it was working to find a solution.

Overall, group revenue fell 3.4 per cent to S$4.15 billion. Turnover from its Australian operations Optus declined 3 per cent to A$1.69 billion (S$1.96 billion), on the back of lower equipment sales and fixed revenues. Group Digital Life revenue grew 61 per cent to S$48 million on higher digital advertising revenues.

As of the end of June, SingTel’s combined mobile customer base was 10 per cent larger, at 525 million, from a year ago.

Meanwhile, the telco’s purchase of this year’s World Cup rights netted more than 100,000 customers. Free screenings at community centres garnered 570,000 views, it estimated, with more than 700,000 downloads on its mobile video platform.

Mr Lew pointed out that SingTel had derived other benefits from bidding for the rights. “We have used the World Cup to extend some of our subscribers’ contracts on the Barclays Premier League. It’s our core long-term sports property. We’ve also got some significant traction in some areas, particularly in business establishments like food courts, hotels, pubs.”

“And one important thing we’ve learnt operationally (is) the impact of mobile video. Particularly in this World Cup, we’ve seen unprecedented take-up of our mio TV GO app.”