SingTel Q2 profit up 20 pc on Asia mobile growth

Singapore, Nov 8: SingTel, Southeast Asia's largest phone firm, posted a 20 percent rise in quarterly profit, as strong Asian mobile growth outweighed weakness at its Australian unit, but said full-year earnings would be flat.

Singapore Telecommunications Ltd., Singapore's largest listed firm, said in a statement on Wednesday it would stick to its previously issued forecast for flat full-year operating revenue and earnings before interest, taxes, depreciation and amortisation.

Optus, Australia's second-largest mobile operator, faces cut-throat price competition, ebbing subscriber growth and regulatory changes in a saturated domestic market, where more than eight in 10 people own a mobile phone.

It battles rivals Telstra and Hutchison Telecommunications and according to Merrill Lynch could face a S-8 billion writedown if profits do not improve materially. The suggestion of a writedown was denied by SingTel.

SingTel said it will pay investors a dividend of 4.6 Singapore cents per share for the first six months of its business year to the end of March 2007 and would adopt a semi-annual dividend payment schedule.

State-controlled SingTel earned underlying net profit before goodwill and exceptionals of S9 million (7 million) in the fiscal second quarter to the end of September, up 20 percent from S2 million a year ago.

Attributable net profit in the quarter was S6 million, up from S6 million a year before.

This was well above an average net profit forecast of about S4 million from a Reuters survey of four analysts.

Battling heavy competition at home, where the mobile phone penetration rate has reached 100 percent, SingTel has spent about S billion in recent years buying firms in high-growth Asian countries and in the bigger Australian market.

SingTel's A billion ( billion) Optus acquisition in 2001 was the largest and most controversial purchase under Chief Executive Lee Hsien Yang, who said in July he would leave the group.

Lee, the brother of Singapore's Prime Minister Lee Hsien Loong, will be replaced in April by Chief Financial Officer Chua Sock Koong.

Optus -- which has one third of Australia's mobile market and has a book asset value of S.2 billion -- is SingTel's single-biggest revenue and profit generator.

But quarterly net profit at the unit fell 12 percent to A0 million due to stiff competition.

The Singapore group derives about three quarters of sales and two thirds of pretax earnings from operations outside Singapore such as Indonesia's Telkomsel and India's Bharti Shares in SingTel, Singapore's biggest listed company, have risen 5.5 percent since January compared with a 17 percent gain in Singapore's Straits Times Index.

REUTERS