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Optus reports lift in first half earnings

Singtel subsidiary reports "solid" mobile service revenue growth

Optus has reported a double-digit lift in first half earnings as the telecommunications provider posted strong mobile growth and managed costs.

Australia's second-largest telco said net profit for the six months to September 30, 2010 came in at $A345 million, up 19 per cent from $A291 million in the prior corresponding period.

Optus, a wholly owned subsidiary of Singapore Telecommunications Ltd (SingTel), said operating revenue grew 3.7 per cent to $A4.58 billion, "supported by solid mobile service revenue growth of 10 per cent".

The company said in a statement on Thursday the result was "driven by strong mobile growth and prudent cost management".

Optus chief executive Paul O'Sullivan said the company's mobile division reported double-digit revenue growth for the eighth consecutive quarter in the three months to September 30, in an "increasingly competitive" market.

"Through a combination of industry leading offerings, a continued focus on improving customer experience and enhanced network performance, Optus grew its mobile customer base by 189,000 in the quarter with wireless broadband customers now exceeding one million," he said.

Operational earnings before interest, tax, depreciation and amortisation (EBITDA) came in at $1.11 billion for the six months to September 30, 2010, up 9.3 per cent from the prior corresponding period.

The mobile division comprised 64 per cent of total revenue in the half, Optus said, and was the largest contributor to earnings.

It was the only division to report a lift in revenue in the half, with sales weaker at Optus's business fixed, wholesale fixed and consumer and SMB fixed divisions.

But EBITDA was up at all divisions, Optus said.

Parent company SingTel said net profit for the group was $S1.835 billion ($A1.420 billion) in the six months to September 30, 2010, down 3.5 per cent from the prior corresponding period.

Revenue across the group rose 9.9 per cent to $S3.106 billion ($A2.403 billion).

SingTel Group chief executive Chua Sock Koong said the telco generated "strong revenue growth and cash flows from Singapore and Australia".

"We are committed to achieving an optimal capital structure and have raised our dividend payout to 55 to 70 per cent of underlying net profit while maintaining financial flexibility for our growth initiatives," Ms Chua said in a statement.

The stronger Australian dollar also helped lift revenue, SingTel said.

In terms of the quarterly results, Optus said net profit rose 15.2 per cent to $175 million in the three months to September 30, compared with the prior corresponding period.

EBITDA grew 9.3 per cent to $A556 million, while revenue was 4.7 per cent higher at $A2.322 billion, the company said.

At 1017 AEDT, SingTel was down one cent at $2.49.

Senior Optus and SingTel executives are due to speak with media at 1315 AEDT on Thursday.

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

More about: etwork, Optus, Singapore Telecommunications, Singtel

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