SingTel net profit dips eight per cent to $S827 million

Optus reports EBITDA growth of three per cent, despite a six per cent decline in revenue for the quarter

Singapore Telecommunications Limited (Singtel), has announced a eight per cent decline in net profit to $S827 ($AUD646.3 million) million for its third quarter FY2012/13 financial results.

Its underlying net profit fell two per cent to $S874 million, while its group revenue fell five per cent to $S4.60 billion. Its EBITDA stood at $S1.26 billion.

In Australia, Optus’ operating revenue declined six per cent to $2.28 billion, but its cost efficiencies lifted the EBITDA by three per cent to $576 million. Its total operating expenses decreased by eight per cent.

According to SingTel Group CEO, Chua Sock Koong, the company’s loss was a result of its investment in networks, strengthening its core business, and transformational initiatives to drive long-term growth. She said it resulted in incurred higher depreciation, spectrum amortisation charges, and increased costs from the acquisition of digital companies.

The Group also registered exceptional charges of $S67 million, including Optus’ ex-gratia payments for the restructuring of its workforce and accelerated depreciation charges related to Globe’s network modernisation and IT transformation programs.

Sock Koong said these factors, together with the impact of the weaker foreign currencies, led to its losses.

To improve its results, the company will be executing a transformation plan to grow in the new digital era, as well as exploiting opportunities in mobile data and enterprise ICT services, according to Sock Koong.

“The Group is focused on driving growth in mobile data services with continued investment in its infrastructure, attractive tiered data plans and meeting customer demand for higher speeds and better user experience,” she said.

In Australia, Optus is restructuring the business to drive profitable growth, improve customer experience and capitalise on the growing demand for mobile data.

In mobile, Optus reported an increase in margin and EBITDA despite lower operating revenue. Optus continued its post-paid customer growth with net additions of 58,000 for the quarter. Post-paid customers now comprise 57 per cent of the total base, up three percentage points from a year ago.

However, higher churn from prepaid wireless broadband products, together with reduced prepaid device subsidies, contributed to a decline in the pre-paid customer base by 36,000.

Within the consumer and SMB fixed business, its EBITDA increased by five per cent on lower traffic costs driven by lower mobile termination rates and lower operating expenses.

Sock Koong added the Group will also focus on the roll out of 4G or Long Term Evolution (LTE) networks.

In Singapore, SingTel will achieve island-wide coverage by the end of March, while in Australia, Optus recently extended its 4G coverage to Brisbane and the Gold Coast, and already covers major capital cities.

“We are also actively building and encouraging the necessary culture within the Group to embrace a global mindset and entrepreneurial spirit, and hiring talents from the digital industries to increase our mix of talent,” she added.

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