SingTel profit falls on Optus goodwill writedown

Singapore Telecommunications (SingTel) saw its net profit for the financial year ended March 31, 2002 fall by 18.7 percent to S$1.63 billion (US$901 million) from S$2.01 billion last year, the company announced Thursday.

The profit drop was largely due to the revaluation of the assets of Australian carrier Optus Mobile Pty Ltd., which was acquired by SingTel last year. SingTel reduced the amount of goodwill -- the price paid over the value of an acquired company's assets, for things such as reputation, the strength of a brand name and other intangibles -- by S$353 million, and reflected this fall in its net-profit result.

SingTel posted revenue for the year of S$7.34 billion, which included six months' contribution from Optus. Excluding the Optus contribution, SingTel's revenue reached S$4.92 billion, the same as for the previous financial year.

Data and Internet services are now SingTel's biggest contributors, accounting for 25 percent of the company's revenue, and posting growth of 16.9 percent over the previous financial year. This growth offsets a 10.3 percent decline in international telephony revenue, formerly the carrier's biggest earner, SingTel said in a statement.

Revenue from cellular services grew 6.3 percent year on year to S$761 million, now accounting for 15.5 percent of the company's revenue.

With its acquisition of Optus, purchase of a stake in Indonesian mobile operator PT Telkomsel, and subscriber growth at affiliates in Thailand and the Philippines, SingTel now reaches over 22 million mobile subscribers in six countries in the region -- Singapore, Australia, Thailand, the Philippines, India and Indonesia -- the company said. In March, SingTel executives said that the company's ultimate goal is to build a regional mobile network within which customers can roam freely without incurring special charges.

Optus revenue rose by 7 percent during the year but it recorded a A$402 million loss (US$209 million), attributed to the general industry downturn and loss associated with the collapse of second-tier Australian carrier One.Tel Ltd., which had leased bandwidth from Optus. Optus is expected to break even within two years, SingTel said in its statement.

Revenue drivers over the next financial year will include leasing of capacity on Optus' C1 satellite and SingTel's C2C cable, while integration of SingTel and Optus should bring about annual savings of S$300 million, according to the statement.

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