Singapore Telecommunications (Singtel) on Wednesday (Nov 13) reported a 42 per cent slump in its first-half net profit due to the absence of a S$1.2 billion (US$896.59 million) gain it had logged through the merger of Telkomsel a year earlier.
Southeast Asia’s largest telecom firm also said it expects its earnings before interest and tax (EBIT) to grow by low double digits for fiscal 2025.
Last year, Telkomsel, the Indonesian associate of Singtel, agreed to merge with its parent’s IndiHome broadband arm to expand into Indonesia’s fixed broadband market.
The firm’s top boss shed some light on Singtel’s progress with developing revenue streams to harness artificial intelligence (AI) and data centres.
“Both NCS and Nxera (Singtel’s data centre brand) have a critical role to play in advancing AI adoption in the region and are continuing to invest in AI infrastructure and capabilities to better serve enterprise and governments,” the group’s CEO Yuen Kuan Moon said.
“We will continue scaling NCS and building out Nxera’s data centres which will commence operations from mid-2025 to meet increasing demand,” Moon added.
Singtel’s Australian unit Optus, currently embroiled in a legal battle with the country’s competition watchdog, reported operating revenue of A$4.02 billion (US$2.62 billion) during the six months, in line with A$4.02 billion reported a year ago.
The telco’s 27 per cent growth in its first-half EBIT, excluding associate contributions, was driven partly by Optus, group chief financial officer Arthur Lang told CNA’s Elizabeth Neo.
Optus will continue to drive momentum in the second half of the financial year, he added.
When asked how allegations that Optus engaged in misconduct in selling mobile phones and plans – particularly to vulnerable customers – would affect business, Mr Lang said his firm has been in the process of remediating with clients and that the issue was “localised” in a few shops.
Mr Lang also spoke about the importance of network resilience when asked if Singtel has plans to relook investment plans for infrastructure and upgrades in light of recent incidents.
Singtel experienced an hours-long landline outage last month caused by a “technical issue” of a network component. The telco also recently said it had detected and “eradicated” malware in June that was purportedly from Chinese state-sponsored hackers.
“We will continue to invest, irrespective of all these incidents … For us, network resilience is pivotal,” he said.
“We work with a lot of industry partners, as well as continue to … adopt industry best practices when it comes to network resilience and cyber security,” he added.
The company said net profit for the six months ended on Sep 30 was S$1.23 billion, as compared to S$2.14 billion last year and missing a Visible Alpha estimate of S$1.37 billion.
The company declared an interim dividend of seven Singapore cents per share, higher than the 5.2 Singapore cents per share declared a year earlier.
