SINGAPORE: Singapore Telecommunications (Singtel) has reported an almost 9 per cent dip in net earnings for the first half of 2008.

Net profit came in at S$1.7 billion on the back of a 5.6 per cent improvement in operating revenue to S$7.7 billion. This was largely in line with analysts’ estimates.

The lower earnings performance was attributed to losses from currency fluctuations, which affected contributions from SingTel's overseas operations.

SingTel expects currency fluctuations to result in lower contributions for the full year from its overseas units.

The telco was also hit by increased costs of subsidies from bringing on Apple's iPhone in the second half of this year.

Higher subscriber acquisition costs from the iPhone launch reduced earnings before interest, taxes, depreciation and amortization or EBITDA by S$27 million and A$44 million for SingTel's Singapore and Australia operations respectively in the second quarter.

As a result, profit for the second quarter declined over 12 per cent on-year to S$868 million. Operating revenue for the three months ended September rose 5.3 per cent to S$3.9 billion.

To weather the current difficult market environment, SingTel has implemented a hiring freeze in Singapore starting last month. It has also halted hiring in Australia from June this year.

However, the company said staff retrenchments to cut costs will be a last resort.

Going forward, SingTel said it will continue to look out for investment opportunities and is eyeing potential deals in Asian markets such as China and Vietnam.

SingTel has announced an interim dividend of 5.6 cents per share amounting to S$892 million in respect of the current financial year ending March 31, 2009.

- CNA/yt