SINGAPORE: Singapore Telecommunications (Singtel) on Friday (Aug 11) reported a 5.6 per cent drop in first quarter net profit, hurt by exceptional items and lower contributions from India's Bharti Airtel, one of its regional associates.
Southeast Asia's largest telecom operator posted a net profit of S$892 million for the three months ended June, including one-off charges from workforce restructuring at its Australian subsidiary Optus, compared with S$944 million a year ago.
Underlying net profit, which excludes one-time items, fell 3.5 per cent.
Singtel said pre-tax profit contribution from Airtel, India's top telecoms operator, dropped 42 per cent due to fierce competition.
CEO Chua Sock Koong said: "We believe that following this intense competition, we will see market consolidation. And Bharti (Airtel) will come up stronger during the competition."
She added that the company has taken a "very long term view" strategy towards India.
The telco said it maintained its outlook provided in May. The company had forecast consolidated revenue to grow by mid-single digits and earnings before interest, tax, depreciation and amortisation (EBITDA) by low single digits for the full year ending March 2018.
With the impending entrance of Singapore's fourth mobile operator, Ms Chua said that she expects competition "to become even more intensive ... against the backdrop of a very penetrated market".
"I have to say that Singtel, we are well prepared for competition. The investments we have made in network, in customer services in the product innovation, we like to think that we are ready for competition."
On Singtel's future, Ms Chua highlighted data and cybersecurity as the two areas of growth, and cited the acquisition of Trustwave as an example of the company building capabilities in cyberspace.
In July, Singtel listed its broadband unit NetLink NBN Trust in a US$1.7 billion initial public offering, reducing its stake in the subsidiary to 24.99 per cent.
Ms Chua said that the proceeds raised from the IPO could be redeployed back to the core business, used for opportunities in mergers and acquisitions, pay debt and other capital management initiatives.
(Reporting by Aradhana Aravindan; Editing by Himani Sarkar and Stephen Coates)
(Additional reporting by Calvin Hui)