Singtel posts first quarterly loss
Telco loses $668 million after taking hit from regional associate, India's Bharti Airtel
Singtel posted its first quarterly loss yesterday - a whopping $668 million of red ink - after taking a hit from one of its regional associates.
India's Bharti Airtel recorded a $5.49 billion pre-tax provision with Singtel forced to take a share amounting to $1.93 billion pre-tax.
That sent its second-quarter earnings crashing from $667 million last year to that shock $668 million loss for the three months to Sept 30.
If the Airtel provision is excluded, Singtel's net profit would have been up 4 per cent, it noted last night.
Airtel was impacted by an adverse court ruling against the industry on the definition of "adjusted gross revenue" for the Indian telco industry.
That led it to take an exceptional provision this quarter of about $5.49 billion.
Singtel's proportionate share was $1.93 billion before tax.
But group chief executive Chua Sock Koong said that notwithstanding the court ruling, "Airtel has made positive strides in the wake of the recent industry consolidation, gaining market share, and increasing mobile service revenue for a third straight quarter".
Singtel's operating revenue slid 2.8 per cent to $4.15 billion, due mainly to a weaker enterprise business, which saw lower spending, carriage erosion and headwinds in Australia.
However, the consumer business across Singapore and Australia had been "resilient".
The telco said capital expenditure is expected to be about $2.1 billion for the year ahead, comprising A$1.3 billion (S$1.2 billion) for Optus and $800,000 for the rest of the group.
Ms Chua said: "The weak global economic environment has affected the industry although on a positive note, our diversified earnings base and our cost management have lifted our performance.
"While we expect current challenging conditions to continue into 2020, we will invest to strengthen our market position, enhance our core networks and build strategic capabilities to capture growth, and be 5G-ready."
Singtel plans to maintain its dividend of 17.5 cents a share for the year to March 31, 2020. The board has approved an interim dividend of 6.8 cents a share for the six months to Sept 30.
Singtel shares closed up 0.3 per cent at $3.30 yesterday.
The company has continued to diversify amid a tough environment for the telco industry. It has ventured into mobile payments and cyber security, and more recently, into the insurance market. - THE STRAITS TIMES