SingTel Fourth-Quarter Profit Rises 30%, Beats Estimates

By David Fickling and Andrea Tan - Thu May 10 06:18:41 GMT 2012

Singapore Telecommunications Ltd. (ST), Southeast Asias biggest phone company, may buy non-phone businesses in China, India or the U.S. as it shifts focus from slower-growing core markets in Singapore and Australia.

SingTel, as the company is known, may raise its stakes in associates in Asia and Africa and make other strategic investments, the carrier said in a statement today, while reporting a 30 percent jump in fourth-quarter profit. Net income climbed to S$1.29 billion ($1 billion) in the three months ended March 31, beating the S$966 million average of seven analysts estimates, helped by a one-time tax credit.

The Singapore-based carrier plans to boost investments in emerging markets and add businesses at its digital services division as the Optus unit in Australia faces continued intense competition and growth slows at home. The company would benefit from acquiring operations such as mobile advertising, according to Carey Wong, an analyst at OCBC Investment Research Pte. in Singapore.

Being a pure carrier doesnt cut it at this stage, Wong said before the earnings announcement. SingTel needs to come up with something new that can monetize the changing trends were seeing among consumers.

SingTel rose 1.6 percent to S$3.21 as of 2:05 p.m. in Singapore, poised for its highest close since Dec. 12, while the benchmark Straits Times Index (FSSTI) fell 0.2 percent. The stock had gained 2.3 percent this year up to yesterdays close, trailing a 9.6 percent climb by the index.

The carrier, which in March announced an agreement to acquire Redwood City, California-based mobile advertising company Amobee Inc. for $321 million, said it planned to add assets at its Digital Life division.

When we look at acquiring the technology know how in the start up space, we could be looking at quite a few different places, Chief Executive Officer Chua Sock Koong told a media conference in Singapore today. It could be startups in Silicon Valley, California or in countries such as India and China, she said.

Group revenue at the Singapore and Australia operations are forecast to grow at low single-digit rates this year while earnings before interest, tax, depreciation and amortization may be stable, SingTel said. Dividends from associates in Asia and Africa are expected to grow, it said.

SingTel owns all of its domestic business and Optus, Australias second-largest phone company, and has minority stakes in associated carriers in more than 10 countries in Asia and Africa.

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SingTel Fourth-Quarter Profit Rises 30%, Beats Estimates