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Lower call rates and rupiah hit SingTel
By Andrea Tan |
February 11, 2009, Wednesday
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Print Edition
Print Edition
SINGAPORE Telecommunications Ltd, Southeast Asia's largest telephone firm, posted its lowest profit in 3 1/2 years after falling phone bills and a drop in the rupiah drove down earnings at the company's Indonesian affiliate.
Net income dropped 16 percent to S$799 million (US$533 million), or 5.01 cents a share, in the three months ended December 31, from S$952 million, or 5.96 cents, a year earlier, the company said yesterday. That compares with the S$807 million median estimate in a Bloomberg News survey of seven analysts. Sales slipped 3.2 percent to S$3.7 billion.
The telco, with operations in seven markets outside Singapore, saw overseas profits fall 25 percent, after earnings from PT Telekomunikasi Selular halved. SingTel now faces mounting competition in Australia, the company's biggest market, after Vodafone Group Plc and Hutchison Whampoa Ltd said this week that they'll merge their operations in the country.
"Competition is rising in Indonesia and it's going to be tough for the overall market but being the dominant player, Telkomsel will ride it out better than others," said Theo Maas, who helps manage US$5 billion at Fortis Investment Partners in Sydney. In Australia, SingTel is "going to see increased pressure with Vodafone. These are difficult times, currencies haven't helped and not likely to."
Contributions from the unit fell 51 percent to S$110 million as lower calling rates and the rupiah's 13 percent drop against the Singapore dollar last year eroded profitability.
Net income dropped 16 percent to S$799 million (US$533 million), or 5.01 cents a share, in the three months ended December 31, from S$952 million, or 5.96 cents, a year earlier, the company said yesterday. That compares with the S$807 million median estimate in a Bloomberg News survey of seven analysts. Sales slipped 3.2 percent to S$3.7 billion.
The telco, with operations in seven markets outside Singapore, saw overseas profits fall 25 percent, after earnings from PT Telekomunikasi Selular halved. SingTel now faces mounting competition in Australia, the company's biggest market, after Vodafone Group Plc and Hutchison Whampoa Ltd said this week that they'll merge their operations in the country.
"Competition is rising in Indonesia and it's going to be tough for the overall market but being the dominant player, Telkomsel will ride it out better than others," said Theo Maas, who helps manage US$5 billion at Fortis Investment Partners in Sydney. In Australia, SingTel is "going to see increased pressure with Vodafone. These are difficult times, currencies haven't helped and not likely to."
Contributions from the unit fell 51 percent to S$110 million as lower calling rates and the rupiah's 13 percent drop against the Singapore dollar last year eroded profitability.
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