** Singapore Telecom Sees Decline in Profit and Revenue **
In the recent quarter, Singapore Telecommunications reported a decrease in both profit and revenue. The company attributed this decline to issues with its units in India and Australia, as well as lower domestic spending.
** Impact on Profit **
Net profit dropped by 13% year-over-year to 465 million Singapore dollars (US$346.2 million) in the fiscal third quarter of the company ended in December. This was largely due to a provision of S$54 million related to a network outage in Australia and certain one-offs at its Indian associate company Bharti Airtel.
** Revenue Challenges **
Operating revenue also saw a 3.2% decrease, partially due to the absence of contributions from former cybersecurity unit Trustwave. The company cited weak corporate and consumer spending in Singapore, price competition, and a shift towards lower-end plans in the market.
** Positive Highlights **
Despite these challenges, Group Chief Executive Yuen Kuan Moon pointed out that underlying results remained stable amidst a tough economic backdrop. Underlying net profit, excluding exceptional items, remained flat at S$559 million.
** Analyst Insights **
While there was a slight miss in the bottom line, analysts like Kenneth Tan from CGS-CIMB noted that underlying net profit met expectations, with subsidiaries showing healthy growth. Citigroup analysts also remain positive on the company’s outlook, pointing to potential cost reductions in the upcoming quarter.
** Looking Ahead **
Citi maintains a buy rating on Singtel’s stock, with a target of S$2.86. Despite a 1.3% drop in shares following the earnings report, there is optimism about the company’s ability to improve moving forward.