This came from the dilution of Singtel&rsquo s effective equity shareholding in associate Airtel from 28.9 per cent to 28.7 per cent

 

SINGTEL&rsquo S : Z74 +3.78% net profit for the first quarter ended Jun 30 rose 42.9 per cent to S$690 million, from S$483 million in the corresponding year-ago period.

 

The increase was mainly attributed to a net exceptional gain of S$88 million, compared to a net exceptional loss of S$88 million in the same period last year, said the telco giant in a business update on Thursday (Aug 15).

 

The net exceptional gain was from the dilution of Singtel&rsquo s effective equity shareholding in associate Airtel from 28.9 per cent to 28.7 per cent. This came after the group redeemed more of Airtel&rsquo s foreign currency convertible bonds.

 

Other components contributing to the net exceptional gain are the sale of telecommunication towers by regional associate Globe, as well as share of Airtel&rsquo s exceptional net gain.

 

Airtel&rsquo s gains included a reversal of an interest provision in relation to a variable licence fee matter, write-back of its share of an associate&rsquo s receivable provision for a major customer, as well as gain from the sale of its wholly-owned subsidiary in Sri Lanka.

 

Meanwhile, Singtel&rsquo s underlying net profit was up 5.4 per cent to S$603 million in Q1 FY2025 from S$571 million the year before. On a constant currency basis, underlying net profit would have risen 8.7 per cent.

 

This comes amid higher net finance expenses and a lower share of profits from its associates &ndash mainly Airtel and Telkomsel.

 

The telco highlighted that in the recorded period, Airtel&rsquo s post-tax contribution was lower due to the translation impact from significant currency depreciation in Africa.

 

Similarly, while Telkomsel reported a higher net profit in local currency terms, its contribution to the group was lower after accounting for the depreciation of the Indonesian rupiah, and the reduction in Singtel&rsquo s equity interest. Singtel&rsquo s Q1 net finance expenses rose 47.3 per cent on the year to S$77 million.

 

This was due to lower dividend income after the group&rsquo s disposal of its 3.9 per cent stake in Airtel Africa last year, as well as a one-off revaluation gain from the settlement of a forward contract.

 

Revenue fell 2.1 per cent to S$3.4 billion in Q1 FY2025 from S$3.5 billion, mainly due to the absence of contributions from its cybersecurity arm Trustwave that it sold for US$205 million.

 

In constant currency terms and excluding Trustwave&rsquo s contributions, revenue would have been stable, led by wholly-owned information technology company NCS and Singtel-owned Australian telco Optus.

 

Looking forward, group chief executive Yuen Kuan Moon said: &ldquo Although the macroeconomic environment appears more challenging, we remain optimistic about the growth opportunities across our markets and are well-positioned with the resources and capabilities to capture them.&rdquo