SingTel net profit up 24% in third quarter

SINGAPORE (AFP) - – Singapore Telecom said Tuesday that strong gains in its home market and Australia helped it post a 24 percent jump in net profit in the third quarter.

Southeast Asia's biggest telecommunications firm by revenue also announced improved contributions from its Indonesia associate helped earnings beat expectations.

Singapore Telecom, or SingTel, said net profit was 991 million Singapore dollars (698 million US) in the three months to December, while group revenue totalled 4.45 billion dollars, up 20.2 percent year on year.

The firm said that as of December 31 it had a regional mobile customer base of 285 million, up 23 percent from a year ago.

SingTel's group chief executive Chua Sock Koong said: "The Singapore and Australia businesses stood out for their exceptional performance in mobile under highly competitive market conditions."

US credit ratings agency Moody's Investors Service said SingTel's results were in line with its expectations and had no immediate impact on the firm's Aa2 rating.

"SingTel's financial metrics and liquidity profile remain strong and continue to leave its standalone rating well positioned at the single A range," said Laura Acres, a vice president and senior credit officer at Moody's.

"However, it is our expectation that SingTel will remain opportunistic in regards to overseas expansion and potential shareholder returns, and will continue to afford itself the financial flexibility necessary to pursue prospects when and if they arise."

Moody's said SingTel's rating factored in expected support from its major shareholder, Singapore sovereign wealth fund Temasek Holdings.

SingTel shares closed seven cents, or 2.4 percent, higher at 3.02 dollars, outpacing the Straits Times Index's 1.91 percent gain.

SingTel's revenues from the home market rose 1.5 percent to 1.53 billion Singapore dollars and those from Australia advanced 4.8 percent to 2.30 billion Australian dollars, driven by strong growth in the mobile phone business.

Pre-tax profit contributions from the firm's regional mobile associates totalled 560 million dollars, up 21 percent year on year, due in part to a 53.1 percent rise in the share from Indonesia's PT Telkomsel.

The company, which has stakes in firms across Asia from India to Australia, said in a filing with the Singapore Exchange that it was also helped by favourable exchange rates.

Its operations in Australia benefitted from a 27 percent appreciation of the Australian dollar against the Singapore currency in the quarter.

However, the firm noted that "cautious corporate telecom spending and demand for business-related services impacted the growth of data and international telephone revenue in Singapore and Australia."

SingTel has expanded beyond its small domestic market and now has a wholly owned subsidiary in Australia called Optus.

In addition, SingTel owns substantial stakes in six Asian mobile telecom firms, namely Bharti in India, PT Telkomsel in Indonesia, the Philippines' Globe Telecom, AIS in Thailand, Warid Telecom in Pakistan and Pacific Bangladesh Telecom.