Friday, May 07, 2004

SingTel reports good results, rewards shareholders 

SingTel is certainly riding high.

After criticism from various quarters for failing to snag HK Telecom in 2000 and then supposedly overpaying for Australian telecom Optus, many had written off SingTel as just another government-linked company that keeps messing up on its investments.

The latest annual result should put an end to such opinions. Yesterday, the telecom giant reported a full-year net profit of $4.49 billion, three times the previous year's result, and the biggest ever for a Singapore-listed company.

The result was boosted by exceptional items totalling $2.29 billion, including gains from the divestment of Belgacom, Singapore Post and SingTel Yellow Pages. But even without such exceptional items and goodwill, the company earned $2.85 billion, a 32 percent increase over the previous year.

Optus, the Australian subsidiary, earned A$440 million excluding an exceptional tax credit of A$24 million, far better than the A$28 million earned the year before.

Shareholders should be especially pleased (remember that SingTel is the most widely-owned company in Singapore after the Singapore government's partial divestment in 1993 that allotted citizens with shares). SingTel management reported that it would increase its final dividend to 6.4 cents a share from 5.5 cents the previous year. In addition, the company would buy back one share for every 14 from shareholders at a price of $2.36.

While future earnings growth will probably slow, SingTel CEO Lee Hsien Yang was confident of prospects. "Our medium-term target of double-digit earnings growth remains," he told reporters covering the announcement of the results.


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