SingTel profit declines 2.9%

Singapore Telecommunications (SingTel), Southeast Asia’s biggest telecom firm, posted a surprise 2.9 per cent fall in its first quarter net profit on Thursday, hurt by weaker contributions from Indian associate Bharti Airtel.But SingTel expects an improvement at Bharti, India’s top mobile phone carrier in which SingTel has about a one-third stake, as the Indian firm’s African operations generate higher revenues and earnings.“In Africa, Bharti is steadily growing its customer and usage levels, with corresponding improvements in revenue and EBITDA,” SingTel’s CEO for international operations Hui Weng Cheong said in a statement.“It has been a year since Bharti began its operations in Africa. Its transformation and restructuring plans are progressing well and Africa is positioned to deliver further growth for Bharti,” he added. Bharti reported a larger-than-expected 28 per cent fall in quarterly profit, partly hit by interest costs related to its purchase of the African businesses of Kuwait’s Zain. SingTel’s underlying net profit, which excludes exceptional items and exchange differences on capital reduction of certain overseas subsidiaries, net hedging as well as significant exceptional items of associates, fell by a steeper 7.4 per cent to S$873 million ($716.8 million). SingTel bought stakes in mobile operators in high-growth Asian countries such as India, Indonesia and Thailand about a decade ago to boost growth and reduce its reliance on Singapore.But as these emerging Asian markets mature and growth slows, SingTel has come under pressure to find new growth drivers. “We will continue to invest for sustained growth into the future. Many of our new initiatives are in the early growth phase and we are on track to transform ourselves beyond a traditional communications company,” said Group CEO Chua Sock Koong. Besides searching for new investments in emerging markets, SingTel has been investing in pay TV in Singapore and other content that can be delivered via mobile devices or ultra-high-speed networks to customers in Singapore and Australia.