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Singtel Posts 2% Profit Increase in Q1 of FY2016-17

Asia

Singtel Posts 2% Profit Increase in Q1 of FY2016-17

Singapore Telecommunications Limited reported an increase of 2% in net profit for the quarter ended June 2016 to S$944 million ($701.5 million), on the back of strong mobile data and cyber security services revenue growth.

The company posted a net profit of $944.6 million for the quarter ended June 30 as compared with $834.6 million in the same period the previous year. Excluding exceptional items such as divestment gains, underlying net profit grew 2 per cent, it said. Barring one-off gains in the same quarter last year, profit would have grown 7%, or 9% in constant currency terms.

Singapore

Ms Chua Sock Koong, Singtel Group CEO said, “The recurring theme across all our markets is mobile data. Having invested extensively in 3G and 4G networks and services and with the rise of smartphone adoption, our associates were well-positioned to successfully drive data usage and customer growth. Across Singapore and Australia, our quality networks, differentiated content and flexible data pricing plans also helped us stand out from competitors,” says Chua Sock Koong, Singtel Group CEO in the press release issued by the company.

In the same quarter last year, the Group had recorded exceptional gains on the divestment of certain venture investments and Airtel Africa’s tower assets. Operating revenue for the quarter fell 7% and in constant currency fell 6%, due to mandated cuts to mobile termination rates in Australia. Excluding the impact of the rate reduction, operating revenue dipped 1% in constant currency terms, says the press release.

Strong performances by Telkomsel and Airtel saw pre-tax contributions from the regional associates increase 14% for the quarter to S$714 million. Telkomsel recorded strong growth across its voice, data and digital businesses and data customers now constitute almost half of its mobile customer base. In India, Airtel continued to strengthen its market leadership and accelerate its 4G network rollout – also delivering growth in data and voice services. In Thailand, AIS successfully acquired the 900MHz
spectrum, securing continuity of its network leadership while Globe in the Philippines has entered into an agreement to acquire 50% of the telecom assets of San Miguel, including its 700MHz spectrum.

ICT was also a key performer as demand for cyber security services grew, with cyber security revenues of S$109 million for the quarter. Ms Chua added, “Our ICT business is getting a solid boost from new opportunities in cyber security which has emerged as a critical issue for both governments and businesses. Our capabilities and expertise in this global field, together with our trusted partners’ capabilities, are winning new business.”

Looking ahead to the full financial year, Singtel currently expects to report a slim 0.3% increase in net profit to S$944 million, but a 7.1% decline in group revenue to S$3.9 billion.

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