SingTel Q3 profit drops 9.6% to S$902m

No thanks to 3G losses at Bharti’s India operations and weaker regional currencies.

SingTel reported:

In Singapore, Mobile Communications revenue rose 5.8% year-on-year on increased customer connections. Total mobile customer base grew by 61,000 in the quarter to 3.55 million, up 9.9% from a year ago.

Postpaid net additions this quarter was 44,000, up from 40,000 in the preceding quarter driven by higher smartphone connections and strong take-up of data SIMs from integrated mobile broadband bundles. IT and Engineering revenue declined 6.0% on lower fibre rollout revenue as OpenNet reached peak rollout. Excluding fibre rollout, the Singapore Business’ revenue grew 4.4% from a year ago.

In Australia, Optus’ revenue grew 1.5% amid an intensely competitive market. Mobile service revenue increased 2.4% year-on-year with continued postpaid customer growth. Postpaid net additions this quarter was 113,000 and total mobile customer base reached 9.41 million.

In Business and Wholesale fixed, revenue was stable. Revenue from Consumer and SMB fixed declined 6.0% with continued exit of fixed resale services and lower broadband ARPU. Optus’ translated revenue in Singapore Dollars grew 2.8% from a year ago as the Australian Dollar strengthened by 1%.

The Group’s EBITDA declined 2.2% to S$1.26 billion as EBITDA from the Singapore Business was impacted by costs associated with higher mobile customer connections and the launch of iPhone 4S, as well as a full quarter of lease payments to NetLink Trust. Optus’ EBITDA was up 1.6% in Australian Dollar terms and grew 2.8% in Singapore Dollar terms.

The Group and its regional mobile associates continued to register strong customer growth. As at 31 December 2011, the combined mobile customer base reached 434 million, up 13% from a year ago.

Telkomsel and AIS recorded strong operating performance supported by robust data growth. In the Philippines, Globe delivered strong growth in mobile and broadband but profit declined mainly due to higher marketing and subsidy expenses from iPhone 4S launch.

In South Asia, Bharti recorded healthy revenue and EBITDA growth though earnings were impacted by higher depreciation, spectrum and interest costs related to 3G rollout. Bharti Africa reported positive free cash flow for the first time this quarter. It also posted robust revenue and EBITDA growth and crossed the 50 million customer milestone as at 31 December 2011.

With 3G losses at Bharti’s India operations and weaker regional currencies, the associates’ ordinary pre-tax contributions declined by 8.3%. The associates’ results this quarter also included a net loss from NetLink Trust, a business trust established pursuant to regulatory requirements in Singapore on structural separation.

Consequently, the Group’s EBITDA and share of associates’ pre-tax profits declined 4.0% to S$1.73 billion.

Net finance expense increased 25% as the last corresponding quarter recorded a one-off exchange gain of S$13 million on the Group’s foreign currency consideration payable for the upstake in Bharti.