Extracted From Dow Jones Newswires
UPDATE: SingTel Faces Stiffer Competition In Indonesia
(This story was first published at 1128 GMT Friday)By Jessica Tan
Of DOW JONES NEWSWIRES
JAKARTA (Dow Jones)--PT Telekomunikasi Selular, an Indonesian mobile company 35% owned by Singapore Telecommunications Ltd. (T48.SG), expects heightened competition in 2006, posing another challenge to SingTel's earnings goals.
Telkomsel, Indonesia's biggest mobile operator by market share, Friday warned that average revenue per customer would fall 12%-14% in 2006 and, subject to shareholder approval, may cut its 2005 dividend to 50% of profit from 60% in 2004.
Attracted by Indonesia's relatively low mobile penetration rate, foreign telecommunications companies are queuing to begin operations in Southeast Asia's most populous nation.
Only about 18% of Indonesia's 220 million people have cell phones - among the lowest penetration rates in Asia.
Malaysia's Maxis Communications Bhd., which owns 51% of PT Natrindo Telepon Selular, and Hong Kong-listed Hutchison Telecommunications International Ltd., which has 60% of PT Cyber Access Communications, are expected to begin operating in Indonesia in 2006.
Telkomsel, which generated 16% of SingTel's net profit of S$796 million for its first quarter ended June 30, is putting a brave face on developments.
"We are not afraid of competition," Chief Executive Kiskenda Suriahardja told reporters at a briefing Friday.
"We are ready for competition as long as competition is rational competition," he said.
Telkomsel's 65% shareholder is PT Telekomunikasi Indonesia (TLKM.JK), or Telkom.
Kiskenda predicted Telkomsel, which has about 50% of Indonesia's mobile market, would at least maintain this market share in 2006.
The company expects to have 25 million customers at the end of 2005, compared with 22.5 million at June 30.
But the drive to retain market share may come at the expense of profit margins and dividends, particularly with Telkomsel ramping up capital expenditure in a preemptive move against the new entrants.
The prospect of greater competition in Indonesia comes on top of recent weakness in the Indonesian rupiah, which SingTel has said could hurt its share of earnings from Telkomsel.
SingTel, which is counting on its regional mobile businesses to deliver its goal of double digit earnings growth, is also facing pressure in Australia, where intense competition and a slowing telecommunications market has hit profit margins at its Optus unit.
Optus contributes over two thirds of SingTel's annual revenue.
The company faces similar problems in its home market Singapore, where mobile penetration is near 100% and the fixed line business has only limited prospects for growth.
Kiskenda said Telkomsel will spend US$800 million to US$850 million on capital expenditure in 2005, up from the previous estimate of US$700 million.
At the briefing, Kiskenda said the company will extend its network to cover all the sub counties of Bail and Java to lock in subscribers before new competitors launch their services.
In 2005, the company forecasts revenue and earnings before interest, tax, depreciation and amortization to grow 30% from 2004.
Kiskenda didn't give a forecast for 2006.
SingTel, which is 61.8% owned by Singapore's state-owned investment company Temasek Holdings Pte Ltd., has spent about S$20 billion over the past few years to bolster its regional presence.
The company's five regional associates accounted for 36%, or S$273 million, of the group's first quarter underlying net profit - up 23% from a year earlier.
5 comments:
Extracted fro Dow Jones Newswires.
SingTel Repeats Weak Rupiah To Affect Telkomsel Profit
Extracted Dow Jones Newswires.
September 18, 2005 23:28 ET
SingTel Reiterates Div Policy Of 40-50% Profits -Analyst
SINGAPORE (Dow Jones)--Singapore Telecommunications Ltd. (T48.SG) Monday reiterated its policy of paying 40% to 50% of recurring earnings as dividends, according to an analyst who participated in a briefing by the company.
Southeast Asia's largest telecommunications company by market capitalization earlier Monday said full year earnings before interest, tax, depreciation and amortization would fall due to competition in Australia.
Optus, the company's Australian business, contributes to more than half of SingTel's annual revenue.
Extracted Dow Jones Newswires
UPDATE: SingTel Cuts Profit Guidance As Optus Struggles
By Jessica Tan
Of DOW JONES NEWSWIRES
SINGAPORE (Dow Jones)--Hit by fierce competition in Australia's mobiles market, Singapore Telecommunications Ltd. (T48.SG) cut its full year earnings forecast, marking the company's first profit warning since listing in 1993.
Southeast Asia's largest telecommunications company by market capitalization said in a statement Monday that operational earnings before interest, tax, depreciation and amortization will decline in the current fiscal year.
The company, majority owned by the Singapore government, also warned it may not achieve double-digit growth in profit before goodwill and exceptional items, but this remains its objective in the medium term.
SingTel largely blamed the weaker earnings on competition in Australia's mobiles market, where its Optus unit is fighting over a slowly growing pool of customers with Telstra Corp. (TLS.AU), Vodafone PLC. (VOD.LN) and Hutchison Telecommunications (Australia) Ltd. (HTA.AU)
With more than 90% of Australians owning a mobile phone, Optus and its major rivals have launched aggressively discounted calling plans to win new customers in what analysts and operators agree is a mature market.
Growth from the Australian mobile market is "grinding to a halt," said Phillip Securities analyst Nirgunan Tiruchelvam.
At 0335 GMT, SingTel was down 7 cents or 2.7% at S$2.49.
The profit warning from SingTel comes just two weeks after Telstra, Australia's largest telephone company by customers, warned its full year earnings before interest and tax could fall as much as 10%.
Telstra blamed the mobile market, regulatory costs and a declining fixed line business for its profit warning, which has the potential to derail the A$30 billion-plus sale of the Australian government's 51.8% stake, expected in 2006.
For the fiscal year ended Mar. 31, 2005, SingTel posted a profit before goodwill and exceptional items of S$3.06 billion, up 21.6% from S$2.52 billion in the previous year.
Mobile Competition
SingTel said competition in Australia has been much fiercer than it anticipated, putting considerable pressure on profit margins.
About 70% of SingTel's revenue comes from outside Singapore, with wholly-owned Optus contributing more than half of the group's revenue.
In May, Optus said it expected operational EBITDA margins for the current financial year to fall, but still come in above 30%. However, margins are now expected to be one to two percentage points below that guidance.
Optus is expected to report flat revenue for its second quarter ending Sept. 30 compared with a year earlier.
"Clearly, this is reflective of the broader pressure in the Australian telecommunications market," Deutsche Bank analyst Richard Long said.
"The quantum was a little bit more than the market had expected. EBITDA margins are going to be down from guidance and the guidance was already for a decline in margins," he said.
Optus is maintaining its strategy of investing in new mobile and fixed line networks and continues to target capital expenditure of A$1.1 billion in its current financial year.
Bad News From Indonesia
The lower profits from Australia put an even greater onus on SingTel's regional mobile investments to deliver growth.
Despite Indonesia's PT Telekomunikasi Selular, 35% owned by SingTel, Friday warning of heightened competition in 2006, SingTel there said is no change in guidance for its regional associates.
Telkomsel, Indonesia's largest mobile phone operator by market share, said average revenue per customer would fall 12%-14% in 2006 and, subject to shareholder approval, may cut its 2005 dividend to 50% of profit from 60% in 2004.
That bad news comes on top of recent weakness in the Indonesian Rupiah, which SingTel has said could hurt its share of earnings from Telkomsel.
After Australia and Singapore, Telkomsel is the next biggest contributor to SingTel's earnings, generating about 16% of profit in the first quarter ended June 30.
SingTel also has a 21.45% stake in Thailand's Advanced Info Service PCL (ADVANC.TH), a 30.84% stake in India's Bharti Tele-Ventures Ltd. (532454.BY), a 44.63% shareholding in the Philippines' Globe Telecom Inc. (GLO.PH) and a 45% stake in Pacific Bangladesh Telecom Ltd
Extracted From Dow Jones Newswires
Optus CEO: Defending Market Share Is Priority
(MORE TO FOLLOW) Dow Jones Newswires
September 19, 2005 00:19 ET
SingTel Optus CEO: Expects To Take Market Share
(MORE TO FOLLOW) Dow Jones Newswires
September 19, 2005 00:20 ET
SingTel Optus CEO: Market Revenue Growth Seen At 2-3%
(MORE TO FOLLOW) Dow Jones Newswires
September 19, 2005 00:20 ET
SingTel Optus CEO: Mobile Competition To Remain Intense
(MORE TO FOLLOW) Dow Jones Newswires
September 19, 2005 00:21 ET
SingTel Optus CEO: No Comment On Commander Speculation
(MORE TO FOLLOW) Dow Jones Newswires
September 19, 2005 00:21 ET
Optus CEO: Defending Market Share Is Priority
SYDNEY (Dow Jones)--Singapore Telecommunications Ltd.'s (T48.SG) Optus unit will continue to aggressively defend its share of Australian telecommunications market, despite pressure on margins, Optus Chief Executive Paul O'Sullivan said Monday.
The company continues to expect to take market share from its competitors in the key mobile and broadband markets, O'Sullivan told Dow Jones Newswires in an interview.
The group commands an approximate 33% share of the Australian mobile phone market, compared to the 45% held by Australia's biggest phone company, Telstra Corp. (TLS.AU).
SingTel cut its full year earnings forecast earlier Monday on the back of pressure on earnings and margins at Optus, particularly in the mobiles sector.
Nonetheless, O'Sullivan said his company continues to expect to beat industry revenue growth, which is seen at 2%-3% for the year to June 2006.
However, the Optus chief warned that competition in the mobile phone arena is likely to remain fierce.
TECHNICAL TALK: $2.47 Is Key Support For SingTel
By Andrew Torchia
A Dow Jones Newswires Column
SINGAPORE (Dow Jones)--Shares in Singapore Telecommunications (T48.SG) are holding up fairly well despite the company's profit warning, but the charts show a considerable chance of a further slide in coming weeks.
Down 2.3% at $2.50 at midday on Monday, SingTel is so far holding important and quite strong support on the April low of $2.47 (also roughly the November 2004 and mid-January 2005 peaks). That level was the base for the stock's gains this year, and while it holds, the shorter-term outlook for SingTel won't be unambiguously negative.
However, the technical picture has weakened greatly in recent weeks, so it won't be surprising if $2.47 support breaks sometime in coming days.
In late August, the stock broke below its long-term uptrend line from March 2003 while posting a negative weekly momentum divergence; 10-week momentum is trending down and at its lowest level since December 2002.
The stock has this month broken cleanly below its 200-day moving average (now at $2.59), and today it has triggered a head & shoulders pattern formed by the June, July and late August peaks.
All of these events are classic signs of a negative reversal of an uptrend, suggesting that in coming weeks, SingTel may well give up more of the gains of the past few years.
Any clean break (at least a daily close) below $2.47 would immediately target $2.40 underlying support (the late January lows). But the head & shoulders would indicate a lower target: the $2.20 area, which is also roughly the 38.2% retracement of the rise from December 2002.
Key resistance is on the downtrend line from the August peak, now at $2.61 and falling about 0.8 cent per day; the slope of the trendline implies the $2.20 area would be hit within three months at the most. The trendline would need to break to indicate medium-term downward pressure on the stock had eased.
Post a Comment