SINGTEL reported on Thursday (Aug 15) that its net profit for the first quarter ended Jun 30, rose 42.9 per cent to S$690 million, from S$483 million in the corresponding year-ago period.
The increase was mainly attributed to a net exceptional gain of S$88 million, compared to a net exceptional loss of S$88 million in the same period last year.
The net exceptional gain was from the dilution of Singtel’s effective equity shareholding in associate Airtel from 28.9 per cent to 28.7 per cent. This came after the group redeemed more of Airtel’s foreign currency convertible bonds.
Other components contributing to the net exceptional gain are the sale of telecommunication towers by regional associate Globe, as well as share of Airtel’s exceptional net gain.
Airtel’s gains included a reversal of an interest provision in relation to a variable licence fee matter, write-back of its share of an associate’s receivable provision for a major customer, as well as gain from the sale of its wholly-owned subsidiary in Sri Lanka.
Meanwhile, Singtel’s underlying net profit was up 5.4 per cent to S$603 million in Q1 FY2024 from S$571 million the year before. On a constant currency basis, underlying net profit would have risen 8.7 per cent.
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This comes amid higher net finance expenses and a lower share of profits from its associates – mainly Airtel and Telkomsel.
The telco highlighted that in the recorded period, Airtel’s post-tax contribution was lower due to the translation impact from significant currency depreciation in Africa.
Similarly, while Telkomsel reported a higher net profit in local currency terms, its contribution to the group was lower after accounting for the depreciation of the Indonesian rupiah, and the reduction in Singtel’s equity interest. Singtel’s Q1 net finance expenses rose 47.3 per cent on the year to S$77 million.
This was due to lower dividend income after the group’s disposal of its 3.9 per cent stake in Airtel Africa last year, as well as a one-off revaluation gain from the settlement of a forward contract.
Operating revenue fell 2.1 per cent to S$3.4 billion in Q1 FY2024 from S$3.5 billion, mainly due to the absence of contributions from its cyber-security arm Trustwave that it sold for US$205 million.
In constant currency terms and excluding Trustwave’s contributions, operating revenue would have been stable, led by wholly-owned information technology company NCS and Singtel-owned Australian telco Optus.
Looking forward, group chief executive Yuen Kuan Moon said: “Although the macroeconomic environment appears more challenging, we remain optimistic about the growth opportunities across our markets and are well-positioned with the resources and capabilities to capture them.”
The counter closed 1.4 per cent or S$0.04 higher at S$2.91 on Wednesday.
