SINGAPORE: On Monday (21 Aug), Singapore Telecommunications (Singtel) reported a substantial 23. per cent decrease in its net profit for the first quarter.
The decline was attributed to a singular event at Bharti Airtel in Nigeria where the Nigerian naira underwent a significant depreciation against the US dollar, coupled with elevated costs.
Singtel’s share of this exceptional loss amounted to S$62 million.
In a statement, Singtel revealed that the net profit for the quarter ending on 30 June amounted to S$483 million (equivalent to US$355.91 million), a notable drop from the S$628 million recorded in the preceding year.
In the three months ending 30 June, Singtel encountered a net exceptional loss of S$88 million, stemming from the steep depreciation of the Nigerian naira.
This was in stark contrast to the exceptional gain of S$129 million noted a year earlier.
Being Southeast Asia’s largest telecommunications company, Singtel holds an effective stake of 29.5 per cent in India’s Bharti Airtel.
On a fundamental level, the net profit for the quarter showed a notable upswing of 14.5 per cent, amounting to S$571 million.
SingTel also marked a 2.7 per cent drop in its operating revenue for the first quarter, which reached S$3.49 billion.
This reduction was attributed to the challenges posed by currency exchange fluctuations and heightened competition.
Yuen Kuan Moon, Chief Executive Officer of Singtel, acknowledged, “While we saw better performances and higher contributions from our regional associates as market dynamics improved, increased competition and continued declines in legacy services impacted our core telco business in Singapore and Australia.”
“Our focus on cost has helped to reduce some of the effects of the difficult operating environment. Going forward, we expect the integration of our core consumer and enterprise businesses which is underway in both Singapore and Australia, as the next step in our strategic reset, to optimise synergies, help deliver cost benefits and drive growth. ”
Mr Yuen highlighted that Singtel believes Optus will have more certainty in regional Australia following Telstra and TPG’s decision not to appeal the Australian Competition Tribunal and Australian Competition and Consumer Commission’s rulings against the network sharing deal.
Optus, the top revenue-generating segment of Singtel, did witness a rise in operating revenue during the quarter.
However, elevated expenses related to inflation and energy costs resulted in a 5.5 per cent decline in its operating earnings, amounting to S$456 million.