SingTel Q1 net profit falls 2.9%, hit by Bharti

Last Updated: Thu, Aug 11, 2011 05:47 hrs

Singapore Telecommunications (SingTel), Southeast Asia's biggest telecom firm, reported a surprise 2.9 percent fall in its first-quarter net profit on Thursday, hit by the poor performance of Indian associate Bharti.

Bharti Airtel, India's top mobile phone carrier in which SingTel has around a one-third stake, reported a bigger than expected 28 percent fall in quarterly profit, partly due to interest costs related to its purchase of the African businesses of Kuwait's Zain.

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SingTel, the most valuable firm on the Singapore stock market, earned S$916.2 million ($752.3 million) in the quarter ended June, down from S$943 million a year ago. Its profit was below an average forecast of S$962.8 million by four analysts surveyed by Reuters.

Its revenue climbed 7.4 percent to S$4.6 billion as the total number of subscribers, including associates, grew by around 19 percent to 416 million.

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SingTel said the decline in net profit was due to a lack of exchange rate gains as well as higher tax expenses primarily due to the reduction of tax holiday benefits in India.

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Facing a domestic market of just 5.1 million people where almost everyone has at least one mobile device, SingTel has bought stakes in mobile operators in high-growth Asian countries such as India and Indonesia to boost profits. It also owns Australia's second largest telecom firm Optus.

Shares in SingTel, which is 55 percent owned by state investor Temasek Holdings, have fallen by 3.3 percent so far this year, outperforming the broader Singapore market which has dropped by nearly 12 percent.

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