Mon, Nov 10, 2003 - Page 10 News List

Analysts change their mind about SingTel's strategy


Singapore Telecommunications' expansion into the Asia-Pacific has built a strong platform for short-term growth, analysts said following the company's first half profit surge.

SingTel announced last week its net profit for the six months to September was a record S$1.67 billion (US$960 million), higher than the S$1.4 billion dollars it earned for the entire year to March.

In the second quarter to September, net profit rose almost 14 percent from a year earlier to S$473 million, at the upper end of analysts' forecasts of S$400 million S$477 million.

While the interim profit was boosted by SingTel's sale of postal unit SingPost and of local business directory business Yellow Pages, the figures also emphasized the company's positive outlook outside of Singapore, analysts said.

Operating revenue from Sing-Tel's overseas operations grew 47.9 percent to S$3.76 billion in the half-year to September, which helped to offset a decline of 13.9 percent to S$2.05 billion in Singapore.

Overseas operations now contribute 73 percent to SingTel's revenue.

The jump in overseas revenues has been partly driven by its wholly owned Australian unit Optus, which returned to the black in the half.

Strong contributions from regional associates Globe Telecom of the Philippines, Thailand's Advanced Info Service, Indonesia's Telkomsel and Bharti of India also helped, they said.

Barclays Capital's telecom analyst Lloyd Ong was equally optimistic.

"What was really encouraging was the operations of the busi-ness. It's very healthy and very robust," Ong said.

SingTel president and chief executive Lee Hsien Yang pointed to an expansion of its regional operations in a conference last week.

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