SingTel profit slumps 33% on Warid Pakistan losses

Singaporean telecoms incumbent SingTel has reported a sharp fall in quarterly profits owing to losses booked on the sale of its stake in Pakistani operator Warid.

The operator said net income dropped by 33%, to S$868 million ($696 million), for the three months ending March 2013 due to the loss of S$225 million resulting from the sale of Warid.

Comparison with results in 2012 also looked unfavorable due to an exceptional tax credit of S$270 million booked in the final quarter of the previous financial year.

Singaporean telecoms incumbent SingTel has reported a sharp fall in quarterly profits owing to losses booked on the sale of its stake in Pakistani operator Warid.

The operator said net income dropped by 33%, to S$868 million ($696 million), for the three months ending March 2013 due to the loss of S$225 million resulting from the sale of Warid.

Comparison with results in 2012 also looked unfavorable due to an exceptional tax credit of S$270 million booked in the final quarter of the previous financial year.

Underlying net profit was down just 2%, claimed SingTel, owing to foreign currency movements and investments in spectrum, network rollout and other digital initiatives.

Meanwhile, revenues at the company dropped by 6%, to $4.48 billion, because of lower revenues from Optus (Sydney, Australia), SingTel’s Australian business, which is trying to boost its profitability by improving customer service and network coverage.

Earnings before interest, tax, depreciation and amortization (EBITDA) at Optus rose by 3%, despite the unit’s 5% decline in revenue, with SingTel’s overall EBITDA coming in at S$1.43 billion, the same as a year earlier.

In Singapore, revenue dropped by 2%, with growth in mobile and digital services offset by declines in the sale of equipment and fiber rollout.

Regional mobile associates posted a 1% increase in pre-tax earnings, with strong performances by Indonesia’s Telkomsel (Jakarta) and Thailand’s AIS (Bangkok) offsetting a lower contribution from India’s Bharti Airtel (New Delhi), as well as weaker regional currencies.

On a constant currency basis, SingTel said pre-tax earnings would have increased by 6%.

The operator has also managed to grow its customer base (excluding Warid) by an impressive 9%, to 468 million subscribers, over the past 12 months.

“We delivered strong operating results against significant industry challenges and adverse foreign currency movements,” said Chua Sock Koong, SingTel’s chief executive

“Our core business remains robust and provides a strong foundation for continued profitability as well as supports our ambitions to grow in the digital space.”