Singtel profit falls 6% in June quarter

Singtel posts 5.6% drop in Q1 profit

Singapore Singtel posts 5.6% drop in Q1 profit Reuters file

"This is still the investment stage", Singtel chief executive Chua Sock Koon told a Friday press conference. Mobile communication revenue remained resilient as data growth offset lower voice traffic. "Therefore we expect uplift in network usage, or [average revenue per user], which would more than pay for investments we are making in network and spectrum".

Group revenue for the three months to end June rose 8.3 per cent to S$4.23 billion, with global digital and cyber security businesses contributing more than 9 per cent of revenue.

Optus reported a net profit of 171 million Australian dollars (US$134.4 million) in the quarter, down slightly from A$173 million a year ago.

But Singtel's share of pre-tax earnings from regional associates fell 3.8% - or 6.6% in constant currency - to S$673 million, as a result of the shrinking profit at India's Bharti Airtel, which is facing intense competition due to the entry into the market of disruptive new entrant Reliance Jio Infocomm. EBITDA was up almost 3 percent to SGD 1.26 billion, while net profit fell 6 percent year-on-year to SGD 892 million, as a result of lower associates' contributions and exceptional charges for workforce restructuring at Optus.

By contrast, Indonesia's Telkomsel increased its pre-tax profit contribution by 18% due to strong growth in data and digital services. Digital services unit Group Digital Life's revenue surged 91%, driven by digital advertising subsidiary Amobee's strong performance across both social and media advertising. Amobee broke-even for the first time in the June quarter.

Net profit attributable to the owners of the company fell to S$891.6 million in the three months ended June 30 from S$944.3 million in the corresponding period a year ago.

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The company expects Amobee to break even for the full year.

Singtel's management said it remains keen to pursue merger and acquisition opportunities.

In July, NetLink NBN Trust was successfully listed, raising proceeds of S$2.3 billion.

"The group has made substantial investments in network and spectrum to capture higher mobile data consumption", Singtel said.

"Under the right terms and conditions, we would also look at increasing stakes in our associates", she added.

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