SingTel’s growth story under threat as AUD tumbles

Optus’ momentum will be dampened.

The weak Australian dollar will be a key threat for SingTel’s earnings in coming quarters, according to a report by UOB Kay Hian.

The AUD’s weakness came just when Singtel’s associate Optus has finally managed to increase its market share in the continent.

Optus’ revenue rose 5.6% in Q2, on back of an additional 38,000 post-paid subscribers. Pre-paid average revenue per user (ARPU) also grew, while pay TV earnings jumped 18.9% on back of a doubling of its subscriber base.

“Unfortunately, contribution from Australia was dampened by the depreciation of the Australian dollar against the Singapore dollar of 10.6% yoy. We have reduced our net profit forecast for FY16 by 4.7% and for FY17 by 5.1% due to the recent depreciation of the Australian dollar against the Singapore dollar,” said UOB Kay Hian.