SingTel - Q1 Results

SingTel profit up 9.5 pct on Asian mobile growth

SINGAPORE, Aug 4 (Reuters) - Singapore Telecommunications Ltd. , Asia's fifth-largest phone firm, posted a 9.5 percent gain in quarterly profit on Thursday as strong regional mobile phone growth offset a margin squeeze at its Australian unit.

SingTel, the city-state's biggest listed firm, has spent $17 billion in the last four years buying firms in Australia and high-growth Asian nations as it battles fierce competition at home, where nine out of 10 people already own a mobile phone. It derives about 75 percent of revenues and two-thirds of pretax earnings from operations outside Singapore. Its Optus unit in Australia is now SingTel's top revenue earner, but subscriber growth is expected to slow as its market matures.

"We are pleased with the profitable regional mobile business," Chief Executive Lee Hsien Yang said in a statement. "Bharti and Telkomsel continue to contribute strongly to the group's earnings growth."

SingTel, majority owned by the government, made an underlying profit before goodwill and exceptionals of S$762 million ($460 million) in its fiscal first quarter to June, compared with S$696 million in the year-earlier quarter.

This was below an average underlying profit forecast of S$778 million, according to a Reuters poll of eight analysts whose estimates ranged from S$743 million to S$797 million.

Attributable net profit was S$796 million, up 14 percent, thanks to a one-off gain of S$34 million through a stock transaction related to its stake in Indian mobile firm Bharti. Operating revenue grew 6.4 percent to S$3.21 billion.

SingTel's Optus division has a one-third share of Australia's mobile phone market, where more than eight in 10 people own a handset and competition is heating up. Optus reported net profit of A$150 million ($115 million) for the quarter, on a 4.8 percent rise in revenue to A$1.74 billion. Optus Mobile, which boosted sales by 5 percent in the first quarter, contributed 56 percent of overall revenue growth, with the fixed-line divisions contributing 44 percent. Rivals Telstra Corp. Ltd. , Hutchison Telecommunications (Australia) Ltd. and Vodafone Group Plc. have been wooing new users with price deals. New regulations might also squeeze margins, analysts said. Last year, the Australian Competition and Consumer Commission cut fees telecom companies charge each other when their customers make calls to people on rival networks. "This quarter, revenue and EBITDA (earnings before interest, tax, depreciation and amortisation) were impacted by increasing levels of competition, especially in the mobile and fixed business markets across the industry," Optus Chief Executive Paul O'Sullivan said in a statement.

But SingTel's profits were boosted by robust contributions from fast-growing Asian markets, where cellphone users are fewer. The company owns major stakes in five operators: 21.5 percent of Thailand's Advanced Info Service Plc. , 30.8 percent of India's Bharti Group, 44.6 percent of Globe Telecom Inc. in the Philippines, 35 percent of Indonesia's PT Telkomsel and 45 percent of Pacific Bangladesh Telecom Ltd., purchased in June.

SingTel shares have gained about 10.6 percent in the last three months, in line with the rise in the MSCI AsiaPacific telecoms sector average. The stock has outperformed a 3.9 percent increase in Telstra shares and a 7.3 percent gain in Taiwan's Chunghwa Telecom Co. Ltd. .

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