Singapore: Singapore Telecommunications Ltd (SingTel) reported a 1.6% fall in second-quarter net profit on Wednesday, dragged down by higher costs and weaker regional currencies, and flagged a drop in group revenue this fiscal year due to its Australian unit Optus.
SingTel, Southeast Asia’s largest telecommunications firm, said it now expects operating revenue in Australia to fall by mid single-digit levels in the fiscal year ending March 2013, due to price competition and reduced mobile termination rates. Previously, revenue in Australia was expected to grow by low single-digit levels.
With the revised revenue outlook for Australia, SingTel said its group revenue is seen falling by low single-digit levels. But it said group earnings before interest, taxes, depreciation and amortisation (Ebitda) are expected to be stable.
SingTel had net profit of S$868 million ($710 million) for the three months ended in September, down from S$882 million a year earlier.
Excluding exceptional items, underlying net profit was S$886 million. That was below the S$896 million average forecast based on a Reuters poll of six analysts.
SingTel maintained an interim dividend of 6.8 Singapore cents per share.
Pre-tax earnings from SingTel’s regional mobile associates grew 17% to S$549 million, with strong operating performance from Indonesia’s Telkomsel and Thailand’s Advanced Info Service PCL helping to offset weaker results from Bharti Airtel Ltd.
Bharti Airtel reported its 11th consecutive quarter of profit decline last week, with margins under pressure from intense competition.
SingTel shares have risen about 3% this year, underperforming a 14% gain in the broader Straits Times Index.
Of 24 analysts tracking SingTel, 14 have “hold” ratings, six have “buy” or “strong buy” and four have “strong sell”.