Singtel boosts underlying net profit 12%Singtel boosts underlying net profit 12%
Singtel's positive earnings news overshadowed by fallout from Optus network crash.
November 10, 2023
Asian telco group Singtel has boosted its underlying net profit by 12% in the first half, mainly from growth in its IT and infrastructure businesses.
But news of the improved performance was overshadowed by a still-unexplained network fault that took the 10 million customers of Australian subsidiary Optus off air for 14 hours on Wednesday.
Singtel's stock, which had fallen nearly 5% following the Optus crash, rose 1.3% Thursday.
The company reported earnings of 2.14 billion Singapore dollars (US$1.58 billion), boosted by an exceptional gain from the merger of its Indonesian broadband asset Indihome with Telkomsel.
Underlying net profit was SG$1.1 billion ($810 million) and EBIT was SG$1.78 billion ($1.31 billion), up 2.2%, despite a 3.2% fall in revenue.
Fortunately for Singtel executives, the company issued its result online only and they did not have to face down angry media or investors.
That's not the fate of their Optus colleagues, however, who will be forced to front an Australian senate inquiry into the network crash in the next month.
The inquiry will focus on customer compensation and Optus' handling of the incident.
"The question of compensation will be asked and it's our hope that the CEO will have the answers that Australians and 10 million Optus customers expect and deserve," said Senator Sarah Hanson-Young, who will chair the inquiry.
The company has already offered affected users 200GB of free data.
The Australian government has set up two inquiries. Announcing a review by her department, Communications Minister Michelle Rowland said the impacts of the huge outage "were particularly concerning."
She said the industry and governments needed to take stock following a large-scale outage.
In a separate inquiry, regulator ACMA will examine Optus' compliance with rules relating to emergency calls.
Optus reported 14% lower EBIT of 141 million Australian dollars (US$90.2 million) on revenue of AU$4.0 billion ($2.6 billion), a 1.4% gain.
Its biggest improvement came from mobile services, which grew 3.4%, while enterprise revenue declined by 1.3% and opex rose 3.4%.
Singtel group CEO Yuen Kuan Moon said the company had faced macroeconomic and currency headwinds but had "maintained positive momentum" through its IT unit NCS, Digital InfraCo and its Singapore and Australian mobile businesses.
He said the operator had sold SG$5 billion ($3.7 billion) in non-core assets in a "strategic reset" in the past two and a half years.
"Our focus now is on rapidly scaling up our growth engines," he said, citing its new data center partnership with KKR, which has taken a 20% stake in its ASEAN data center business.
Singtel also aims to improve efficiency, targeting a 15% cut in core costs in the next three years.
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