SingTel

SingTel: 2QFYMar13 results missed analyst estimates after currency appreciation hurt earnings. Sales fell 0.9% yoy to $4.57b due to a 4.2% decline in Optus's revenue to A$2.24b, amid industry slowdown. Spore operating revenue however grew 4.4%, contributed by NCS’ strong growth of 11% from major projects. Net income fell 1.6% yoy to $868m, vs Bloomberg consensus at $953m, as the SGD appreciation against the Rupiah and Baht cut the repatriated value of earnings from affiliates. In constant currency terms, underlying net profit would have grown 2.9%. Associates’ pretax contrbutions grew by 15%, despite the weaker regional currencies. The group and its regional mobile associates continued to register strong customer growth, with a combined customer base of 468m, +11% yoy. On outlook, in Australia, price competition and reduced mobile termination rates have led to negative mobile industry revenue growth. For FYMar13, mgt expects EBITDA in Australia to be stable (consistent with earlier guidance), but expects operating revenue to decline by mid single digit level (previously expected to grow by low single digit level). With the revised revenue outlook for Australia, mgt expects the consolidated revenue of the group to decline by low single digit level and Group Consumer and Mobile Communications revenues to both decline by mid single digit levels. Nevertheless, mgt expects group EBITDA to be stable, consistent with earlier guidance. SingTel declared an interim dividend of 6.8 cts, unchg yoy. The stock trades at 13.9x annualized 1HFY13 P/E.