Singtel profit drop

Singapore Telecommunications Ltd., Southeast Asia's biggest phone company, reported an unexpected drop in profit after competition reduced earnings at partners in India and Indonesia.
Net income fell 6.7 percent from a year earlier to S$892 million (US$692 million) in the quarter ended in September.

Bharti Airtel Ltd. in India and PT Telekomunikasi Selular in Indonesia led a drop in earnings from regional affiliates, overshadowing gains from Australian unit Optus.

SingTel, whose largest shareholder is Singapore state investment company Temasek Holdings Pte, boosted its dividend payout ratio to 55 percent to 70 percent of underlying profit from the previous 45 percent to 60 percent.

The company defines underlying profit as net income before exceptional items and exchange differences on capital reduction of certain overseas subsidiaries. SingTel will pay an interim dividend of 6.8 Singapore cents a share, 10 percent more than last year.

Pretax profit contributions from regional associates fell 6.2 percent to S$536 million, the company said. Regional mobile companies accounted for 43 percent of earnings before interest,
tax depreciation and amortization (EBITDA). Optus contributed to 31 percent of EBITDA while the Singapore business provided 24 percent.
SingTel owns 32 percent of Bharti, India's biggest wireless provider, and 35 percent of Telkomsel, as the Indonesian company.

At Optus, Australia's largest phone operator after Telstra Corp., net income increased 15 percent to A$175 million (US$176 million) in the quarter. Operating revenue rose 4.7 percent to
A$2.3 billion. Net income at the Singapore business declined 12 percent to S$295 million.