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Singtel’s Q1 net profit falls 23.1% to S$483 Million due to exceptional loss from Bharti Airtel

On Monday (21 Aug), Singtel reported a significant 23% net profit decrease in Q1, attributing it to a pivotal event at Bharti Airtel in Nigeria where the naira devalued against the US dollar, alongside increased costs.

Singtel’s Q1 net profit was S$483 million (US$355.91 million), down from S$628 million in the previous year.

As Southeast Asia’s largest telco, Singtel holds a 29.4% stake in India’s Bharti Airtel.

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SINGAPORE: On Monday (21 Aug), Singapore Telecommunications (Singtel) reported a substantial 23. per cent decrease in its net profit for the first quarter.

The decline was attributed to a singular event at Bharti Airtel in Nigeria where the Nigerian naira underwent a significant depreciation against the US dollar, coupled with elevated costs.

Singtel’s share of this exceptional loss amounted to S$62 million.

In a statement, Singtel revealed that the net profit for the quarter ending on 30 June amounted to S$483 million (equivalent to US$355.91 million), a notable drop from the S$628 million recorded in the preceding year.

In the three months ending 30 June, Singtel encountered a net exceptional loss of S$88 million, stemming from the steep depreciation of the Nigerian naira.

This was in stark contrast to the exceptional gain of S$129 million noted a year earlier.

Being Southeast Asia’s largest telecommunications company, Singtel holds an effective stake of 29.5 per cent in India’s Bharti Airtel.

On a fundamental level, the net profit for the quarter showed a notable upswing of 14.5 per cent, amounting to S$571 million.

SingTel also marked a 2.7 per cent drop in its operating revenue for the first quarter, which reached S$3.49 billion.

This reduction was attributed to the challenges posed by currency exchange fluctuations and heightened competition.

Yuen Kuan Moon, Chief Executive Officer of Singtel, acknowledged, “While we saw better performances and higher contributions from our regional associates as market dynamics improved, increased competition and continued declines in legacy services impacted our core telco business in Singapore and Australia.”

“Our focus on cost has helped to reduce some of the effects of the difficult operating environment. Going forward, we expect the integration of our core consumer and enterprise businesses which is underway in both Singapore and Australia, as the next step in our strategic reset, to optimise synergies, help deliver cost benefits and drive growth. ”

Mr Yuen highlighted that Singtel believes Optus will have more certainty in regional Australia following Telstra and TPG’s decision not to appeal the Australian Competition Tribunal and Australian Competition and Consumer Commission’s rulings against the network sharing deal.

Optus, the top revenue-generating segment of Singtel, did witness a rise in operating revenue during the quarter.

However, elevated expenses related to inflation and energy costs resulted in a 5.5 per cent decline in its operating earnings, amounting to S$456 million.

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Taiwan’s FSC rejects CTBC Financial’s bid to acquire Shin Kong Financial, favoring Taishin’s merger plans

Taiwan’s Financial Supervisory Commission rejected CTBC Financial’s tender offer to acquire Shin Kong Financial, raising concerns about its plan, while Taishin Financial moves closer to a merger with Shin Kong. Both companies have scheduled shareholder meetings for 9 October.

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3 days ago

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17 September 2024

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On 16 September 2024, Taiwan’s Financial Supervisory Commission (FSC) rejected an application from CTBC Financial Holding Co. to launch a tender offer for Shin Kong Financial Holding Co., potentially clearing the path for Taishin Financial Holding Co. to proceed with its proposed merger with Shin Kong Financial.

Jean Chiu, vice chairperson of the FSC, stated at a press conference that CTBC Financial failed to provide a comprehensive implementation plan for the acquisition. CTBC had proposed acquiring between 10% and 51% of Shin Kong Financial’s shares initially, with plans to later fully integrate the company.

However, the FSC raised concerns over CTBC’s lack of detailed provisions on how it would manage various potential outcomes, particularly if it failed to secure full control of Shin Kong.

Additionally, the FSC highlighted gaps in CTBC’s understanding of the financial health of Shin Kong’s life insurance subsidiary, as well as a lack of firm commitments regarding raising the capital size of this subsidiary.

This uncertainty, combined with the method of payment proposed by CTBC—using a mix of cash and its own stock—raised concerns that the tender offer could negatively affect shareholders due to potential fluctuations in CTBC’s stock price during the transaction process.

CTBC’s proposal, announced on 20 August, included an offer of NT$4.09 (US$0.13) per share in cash and an exchange of 0.3132 CTBC shares for each Shin Kong share, amounting to NT$14.55 (US$0.46) per share. This bid was labeled by Taishin Financial as a hostile takeover attempt, as Shin Kong Financial’s board had not approved the offer.

In response, Taishin Financial, which has been vying for Shin Kong through a merger, revised its stock swap offer on 11 September.

The new offer included 0.672 Taishin shares plus 0.175 preferred shares for each Shin Kong share, translating to NT$14.18 per share—closer to CTBC’s offer. Taishin had earlier disclosed on 22 August its original plan to offer 0.6022 shares of its stock per Shin Kong share, which amounted to NT$11.32 (US$0.36).

Chiu emphasized that tender offers based on stock payments are rare in Taiwan, with only six cases since the 2002 revision of tender offer regulations.

She referenced Fubon Financial Holding’s acquisition of Jih Sun Financial in 2023, where cash was used instead of shares, to highlight how tender offers have traditionally been handled in the local market.

Chiu concluded by stating that although Taiwan’s financial market operates on free-market principles, takeovers should avoid disrupting market order and respect corporate stability.

Taishin Financial and Shin Kong Financial are set to hold a special general meeting on 9 October to secure shareholder approval for their merger plan, which will then require the FSC’s endorsement.

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Business

Times Bookstores to close after nearly four decades in Singapore

Times Bookstores will cease operations in Singapore after nearly four decades, with its final outlet at Cold Storage Jelita closing on 22 September 2024. The closure is seen as being attributed to high rents, low sales, and rising operational costs, reflecting challenges faced by physical bookstores in Singapore.

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4 days ago

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16 September 2024

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Times Bookstores will end its operations in Singapore after nearly 40 years, as its last remaining outlet at Cold Storage Jelita on Holland Road is set to close on 22 September 2024.

In a farewell statement posted on Instagram on 16 September, the English book retailer, established in 1978, invited customers to visit the store one final time. “Our happily ever after has finally come,” the post read. “It is with both a heavy heart and a sense of fulfilment that we announce the closure of Times Bookstores.”

The closure of Times Bookstores has been anticipated for several years. The company, owned by regional consumer group Fraser and Neave Limited, closed its branches in Plaza Singapura and Waterway Point in February 2024.

The shutdowns triggered a discussion in Singapore’s literary community about how to better support bookstores.

Struggles Facing Book Retailers

Times Bookstores has been affected by increasing rent, low sales, and rising operational costs. The Covid-19 pandemic exacerbated its challenges, with the business quietly closing outlets at Marina Square and Paragon in 2021.

A key warning came in 2019 when the retailer closed its 8,000 sq ft Centrepoint branch, once one of Singapore’s largest bookstores.

These closures reflect a broader struggle for physical bookstores in Singapore. Rising rent, higher goods and services taxes (GST), and increasing printing costs have driven book prices up, making it difficult for traditional retailers to compete.

Popular bookstore also shut its Marine Parade outlet on 18 June 2023, citing similar reasons, while Books Kinokuniya closed its JEM branch on 9 May 2022 due to slow sales and rental costs.

Future of Singapore’s Bookstores

Following the closure of Times, few large bookstore chains remain in Singapore. Books Kinokuniya, the largest bookstore in Singapore, continues to operate its flagship store at Takashimaya Shopping Centre.

According to a spokesperson from Toshin Development Singapore, cited by the Straits Times, Kinokuniya remains a key tenant, though no specific renewal dates were disclosed. The spokesperson added that Kinokuniya continues to engage with the landlord regularly to appeal to patrons and remain in trend.

Although Times Bookstores will no longer have physical stores in Singapore, its book distribution business, which supplies books from international and local publishers to other retailers, continues to operate.

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