SingTel

SingTel: 1QFYMar13 results broadly in line. Net profit rose 3.2% to $945.3m, below Bloomberg consensus estimates of $974.3m (3 analysts), but above Dow Jones consensus estimates of $919m (4 analysts). The net profit rise was mainly due to bigger contributions from SingTel’s regional mobile associates and gains from an asset sale in Taiwan, which helped offset currency moves and lower sales at Optus. Pretax profit from SingTel's foreign associates rose 2% to $483m, lifted by strong earnings growth from Indonesia's Telkomsel and AIS in Thailand. Among the associates, Bharti Airtel, in which SingTel owns a 32.3% stake, contributed $95m, 38.4% lower yoy, due to an 18% yoy decline in the value of the INR vs SGD. Contribution from 35%-owned Telkomsel rose 14.7% to $241m, despite a 6% yoy fall of the IDR vs SGD. AIS, 23.3% owned by SingTel, contributed $107m, +38% yoy. Contribution from 47.3%-owned Globe grew 21% to $60m. SingTel also recognised a one-time gain of $119m from the sale of its 3.98% stake in Far EasTone Telecoms of Taiwan that was announced in Apr ‘12. SingTel’s underlying net profit however, fell 3% to $850m as weakness in the AUD and regional currencies adversely affected earnings. A strong performance in Singapore, was offset by falling sales at Australia’s Optus unit where customers canceled contracts and bought less equipment. Revenue from Optus fell 3.2% yoy to A$2.24b and underlying net profit was down 7.4% to A$161m. Measured in SGD, Optus revenue fell a steeper 6.2% to $2.86b. SingTel expects revenue from Singapore and Australia to grow by a "low-single digit" for FY13. The co expects capex of ~$950m in its Singapore operations and A$1.1 b in Australia this year. Says it is embracing the industry changes, by expanding its revenue streams and establishing new growth platforms in the digital space. Recall, the co has announced ~US$899m of acquisitions over the past 12 mths, incl mobile advertiser Amobee for US$321m. The stock trades at 13.5x P/E.