Singapore Telecom sees drop in Q2 profit

SINGAPORE—Singapore Telecommunications Thursday posted a 1.2 percent on-year drop in net profit in the second quarter largely because the stronger local dollar eroded contributions from regional mobile associates.

SingTel, Southeast Asia’s largest telecoms firm by revenue, said that despite the weaker figures, it was still in the market for further investments.

It earned a net profit of Sg$882 million ($683 million) during the July-September period, compared with Sg$892 million in the same period in 2010.

Group revenue for the September quarter rose 3.9 percent year on year to Sg$4.6 billion, SingTel said in a statement.

For the six months to September, net profit was down 2.1 percent to Sg$1.8 billion from a year ago while revenues increased 5.6 percent to Sg$9.2 billion.

Chief executive Chua Sock Koong said the company was still looking to boost its business despite economic uncertainties.

“The global economy is slowing and there is still much uncertainty surrounding the economies in the eurozone,” she said. “Despite headwinds, we are focused on executing our strategy to strengthen our businesses and growing new revenue streams through innovation.”

SingTel is ready to consider raising its stakes in its Asian associates if opportunities arise, Chua told a media briefing.

“If stakes are available…we would definitely be willing to look at it,” she was quoted as saying by Dow Jones Newswires.

“It is our long-term intent to raise our stake in our associates,” she added.

SingTel’s shareholdings in its six Asian mobile associates range from 21 to 47 percent.

It said the earnings decline was mainly caused by the region’s weakening currencies against the Singapore dollar, which resulted in a 12 percent drop in pre-tax earnings to Sg$471 million from its Asian mobile associates.

Second-quarter earnings were also impacted by SingTel’s Indian mobile associate Bharti Airtel, which continued to suffer losses from its operations in Africa.

SingTel, which has a 32 percent stake in Bharti Airtel, saw pre-tax contributions from the Indian associate tumble 37 percent on the year to Sg$131 million.

The Singapore company also has stakes in Thailand’s Advanced Info Service, Globe Telecom of the Philippines, Indonesia’s Telkomsel, Pacific Bangladesh Telecom Limited and Warid Telecom in Pakistan.

SingTel’s wholly owned Australia unit Optus generated second-quarter net profit of Aus$182 million (US$184 million), up four percent from the previous year.