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Singapore. Singapore Telecommunications is eyeing acquisitions in Asia and the fast-growing markets of Africa and the Middle East to boost growth after it reported quarterly earnings in line with estimates.

Southeast Asia’s biggest telecoms company has seen slow growth in Singapore and Australia in recent years, but a strengthening Australian dollar and booming markets in India and Indonesia helped it report a record underlying net profit for the October-to-December period.

Kelvin Goh of CIMB saw de-rating catalysts from competition in India and Australia and prospects of a heated 3G spectrum auction in Australia. Some analysts have said a partial float of SingTel’s fully-owned Australian subsidiary Optus, estimated at about $3.5 billion, to fund expansion in other markets, would be a key trigger for the stock.

SingTel, 54 percent-owned by state investor Temasek Holdings, maintained its outlook for low single-digit growth in earnings before interest, tax, depreciation and amortization for its markets in Singapore and Australia.

The company earns about three-quarters of its core earnings from outside Singapore. “Our focus remains in Asia. That’s unchanged. We are looking at some adjacent markets including Africa and the Middle East,” CEO Chua Sock Koong said.

Facing a domestic market of 5 million people where virtually everyone has a mobile phone, SingTel has spent 18 billion Singapore dollars in recent years buying stakes in India, Indonesia and in the bigger Australian market.

SingTel had supported a bid by India’s Bharti Airtel to buy South Africa’s MTN, but the deal collapsed last year.

Among SingTel’s regional units, Bharti led growth in mobile subscribers, up 39 percent, but still faces a cloudy outlook due to a price war.

In Indonesia, Telkomsel’s mobile subscriptions rose by a quarter in the period under review.

In Australia, where SingTel owns second-largest telecom company Optus, revenues were better than expected. Income was further boosted by a 27 percent gain in the Australian dollar in the quarter versus the Singapore dollar.

SingTel, Singapore’s highest valued company with a market capitalization of 46 billion Singapore dollars, posted October-December underlying net profit of 990 million Singapore dollars ($695 million), up from 838 million Singapore dollars a year ago.

This was just below an average forecast by analysts of 995 million Singapore dollars, but its highest ever underlying profit according to the company.

SingTel’s global subscriber base grew 22.5 percent to 284 million as of December, helping boost quarterly revenue 20 percent to 4.5 billion Singapore dollars.

SingTel’s shares have slipped around 3 percent this year, underperforming its Asian rivals and versus a 7 percent fall in the broader Singapore index.



Reuters