Singapore Telecom net profit falls 1.7 per cent

Singapore Telecom net profit falls 1.7 per cent

Singapore - Singapore Telecom blamed the strength of the local dollar after it announced Friday net profit fell 1.7 per cent in the quarter to the end of December.

Net profit totalled S$954 million (US$683 million), down from S$970 million in the same period the year before.

Singtel, Southeast Asia's biggest telecom firm by revenue, said the profit decline was mainly due to the Singapore dollar gaining against the currencies of countries where it has businesses.

It also pointed to higher investment costs, to strengthen its capabililities in a range of areas, as a reason for the dip in profits.

Group revenue came in at S$4.5 billion, up 1.1 per cent, the company said in a statement.

"We are investing significantly in our engineering talent and strengthening our core capabilities in cyber security, data analytics and cloud computing," group chief executive Chua Sock Koong said in a statement.

"This is helping the enterprise business stay relevant and resilient in the face of both technology disruption and softer business sentiment."

A large portion of Singtel's earnings come from overseas after its expansion beyond the domestic market, making it vulnerable to currency movements.

Singtel has a wholly owned subsidiary in Australia called Optus.

It also owns substantial stakes in leading mobile telecom firms in India, Indonesia, the Philippines and Thailand.

The firm's earnings are reported in Singapore dollars and were diluted due to the strength of the city-state's currency.

Against the Singapore dollar, the Australian dollar fell 8.4 per cent, the Indonesian rupiah declined 3.9 per cent and the Thai baht eased 0.4 per cent during the quarter.

In constant currency terms, net profit grew 1.0 per cent, Singtel said.

Singtel's pre-tax earnings from its regional mobile associates climbed 0.2 per cent to S$647 million.

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