Forex losses push SingTel's profits down

SingTel’s first quarter profit fell 2.9%, due to forex woes and finance and tax expenses, despite higher revenue across the board.
 
The company generated a profit of S$943 million (€545 million) and 7.4% higher group revenue of S$4.29 billion, as its core businesses in Singapore and Australia – through subsidiary Optus – each grew revenue around 2%.
 
But pre-tax earnings from the company's regional affiliates slumped 10% due to weaker local currencies and ongoing losses from Bharti Africa, which drove down the contribution of SingTel's 32.04% stake in Bharti Airtel 19.6% to S$154 million.
 
The group's total subscriber base grew 19% to 416 million. In Singapore, SingTel added 57,000 postpaid mobile subscribers, and estimates it grew its market share to 45.3%.
 
Australia: Optus vs Telstra
 
Optus added 113,000 postpaid mobile customers, and increased its mobile revenue 5% to S$1.49 billion.
 
But Ovum estimates that Optus' market share fell nearly 1% to 31.8% during the financial year ending in June, and its ebitda margins are under pressure.
 
Optus' loss was rival Telstra's gain. The incumbent operator added 1.66 million new domestic mobile customers, of which 645,000 were post-paid, over the financial year.
 
Mobile revenues grew 11%, and its mobile market share grew to 43% from 39.6% a year ago, according to Ovum.
 
“[But] the gains have come at a price – A$670 million [€483 million] in mobile opex in FY11 and 35% higher subscriber acquisition and retention costs,” senior analyst Nicole McCormick notes.
 
Telstra reported a 17.5% slump in total profit for the year, and a marginal 0.7% increase in overall revenue. But this result beat market expectations, and Telstra is forecasting low single digit ebitda growth for the year ahead.

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