Singapore/New Delhi: Singtel, which holds nearly 30% stake in India’s Bharti Airtel, has posted a steep drop in the fourth quarter profit to about $615.3 million even as the Indian entity’s contribution to the bottomline rose 18% during the same period.
Hit by foreign exchange volatility and impairment charge, Singapore telecom major Singtel’s profit slumped 17.3% to 903 Singapore dollars (about $615.3 million) for the fourth quarter ended 31 March, 2009.
In the year-ago period, the profits stood at 1.09 billion Singapore dollars, it said in a statement.
Moreover, Singtel said that it expects local currency earnings of its two largest associates — Bharti and Indonesia’s Telkomsel, to grow.
Indian telecom giant Bharti’s contribution to the group’s pre-tax ordinary profit was 225 million Singapore dollars for the fourth quarter, an increase of 18.4% in local currency terms (Indian rupees).
Bharti’s profit-share rose by 1.4% in terms of Singapore dollars.
“In the fourth quarter, the group’s share of Bharti’s pre-tax ordinary profit in Indian rupee terms increased 18% as it attracted 31.9 million new mobile customers from a year ago,” Singtel said.
Singtel’s group revenues for the fourth quarter declined 5.1% to 3.57 billion Singapore dollars. The firm had revenues to the tune of 3.76 billion Singapore dollars in the year-ago period.
The statement noted that in the fourth quarter, the group recorded “goodwill impairment charges of 330 million Singapore dollars for its associates, Warid and PBTL, that were partially offset by an exceptional gain of 217 million Singapore dollars from Bharti’s dilution of its equity interest in a subsidiary”.
According to the Singaporean firm, Bharti had a total of 93.9 million cellular customers, an increase of 52% for the year ended 31 March 2009, as against the same period a year ago.
Singtel said that the group anticipates the local currency earnings of its two largest associates, Bharti and Telkomsel, to grow. “Bharti will continue to leverage its scale advantage in a fiercely competitive but rapidly-expanding market,” it added.
Singtel’s (CEO International) Lim Chuan Poh said that its regional associates continued their strong growth in acquiring customers despite intense competitive pressures.
“For the full year, Bharti performed well and this quarter Telkomsel increased its subscriber market share,” Poh added.
The Singaporean company said that financial performance for the current financial year would be adversely impacted by exchange rate movements.
“SingTel continues to look for new investments in Asia and emerging adjacent markets and will be financially disciplined in its evaluation of these opportunities,” SingTel Group chief executive officer Chua Sock Koong said.