SingTel profits to surge after regional expansion<\/p>\n
Agence France-Presse, Singapore<\/p>\n
Singapore Telecommunication (SingTel) expansion into the Asia-
\nPacific has built a strong platform for short-term growth,
\nanalysts said following the company's first half profit surge.<\/p>\n
SingTel announced last week its net profit for the six months
\nto September was a record S$1.67 billion (US$960 million), higher
\nthan the S$1.4 billion it earned for the entire year to March.<\/p>\n
In the second quarter to September, net profit rose almost 14
\npercent from a year earlier to S$473 millions, at the upper end
\nof analysts' forecasts of 400-S$477 million.<\/p>\n
While the interim profit was boosted by SingTel's sale of
\npostal unit SingPost and of local business directory business
\nYellow Pages, the figures also emphasized the company's positive
\noutlook outside of Singapore, analysts said.<\/p>\n
Operating revenue from SingTel's overseas operations grew 47.9
\npercent to S$3.76 billion in the half-year to September, which
\nhelped to offset a decline of 13.9 percent to S$2.05 billion.<\/p>\n
Overseas operations now contribute 73 percent to SingTel's
\nrevenue.<\/p>\n
The jump in overseas revenues has been partly driven by its
\nwholly owned Australian unit Optus, which returned to the black
\nin the half.<\/p>\n
Strong contributions from regional associates Globe Telecom of
\nthe Philippines, Thailand's Advanced Info Service, Indonesia's
\nTelkomsel and Bharti of India also helped, they said.<\/p>\n
\"Basically Optus and the regional associates... they have been
\ngrowing phenomenally,\" said DBS Vickers Securities telecom
\nanalyst Himanshu Chaturvedi.<\/p>\n
\"As far as I see it, they are going to have a record year of
\nearnings.\"<\/p>\n
Barclays Capital's telecom analyst Lloyd Ong was equally
\noptimistic.<\/p>\n
\"What was really encouraging was the operations of the
\nbusiness. It's very healthy and very robust,\" Ong said.<\/p>\n
\"It's a very solid result and broad-based.\"<\/p>\n
SingTel president and chief executive Lee Hsien Yang pointed
\nto an expansion of its regional operations in a press conference
\nlast week.<\/p>\n
\"We could be looking at new countries. It could be both mobile
\nand other businesses,\" Lee said.<\/p>\n
\"Our international investments continue to perform strongly...
\nour regional mobile businesses are growing in terms of profits as
\nwell as dividends.\"<\/p>\n
Particularly gratifying for SingTel was Optus' improved
\nperformances, turning in a net profit of A$190 million ($134.8
\nmillion) in the first-half against a A$76 million loss a year
\nago.<\/p>\n
SingTel was widely criticized two years ago when it bought the
\nAustralian telecoms firm for S$13 billion, with some analysts
\ndeeming the price tag as too expensive.<\/p>\n
SingTel, majority-owned by the Singapore government, acquired
\nOptus and equity stakes in regional telecom companies to reduce
\nits reliance on its home market where liberalisation since 2000
\nhas seen the carrier's dominance gradually eroded.<\/p>\n
SingTel is still the city-state's biggest telecommunications
\nservice provider but domestic income has declined amid fierce
\ncompetition from StarHub and Mobile One in Singapore's small
\nmarket of four million people.<\/p>\n
SingTel has also undergone major structural changes in
\nSingapore as it hives off non-core assets to focus more on its
\ntelecommunications.<\/p>\n
SingTel made a one-time gain of S$545 million after disposing
\nof 69 percent of SingPost in a public listing and S$160 million
\nfrom the Yellow Pages sale.<\/p>",
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