In contrast to the lower result from Telstra, Singapore Telecommunications said yesterday that Optus’ net profit was up steeply in the June quarter, thanks to the strongest growth in five years.
Optus is wholly-owned by SingTel which reported earnings yesterday to the ASX and Singapore Stock Exchange.
Strong performances by operations in Australia and Singapore offset weak results from elsewhere in Asia.
Singtel said Optus had a net profit for the three months to June 30 of $170 million, up 22.4% the equivalent period in 2009.
That came off a rise in revenue of just 2.6% to $2.26 billion.
”Optus recorded the strongest quarterly EBITDA (earnings before interest tax depreciation and amortisation) growth in five years, mainly driven by strong mobile growth and prudent cost management,” SingTel said in yesterday’s statement.
Operational EBITDA of Optus was $553 million, up 9.7% on the same period of 2009.
”In (Optus) mobile, service revenue rose 11 per cent year-on-year, matched by strong EBITDA growth of 11 per cent,” SingTel said.
”Optus’s continued investment in the mobile network has delivered significant improvement in coverage and performance over the last 12 months,” it said.
It said that during the 2010 FIFA World Cup, Optus delivered over 350,000 live streams of the FIFA World Cup matches to customers on their compatible 3G handsets.
SingTel’s CEO, Chua Sock Koong said competition in emerging markets led to lower earnings, as those divisions responded to competition to protect market share.
‘‘The Singapore and Australia businesses turned in strong performances, especially in mobile with both reporting double-digit revenue growth,’’ Ms Chua said in a statement.
SingTel forecast operating revenue and EBITDA at its Australian arm to grow at mid single-digit levels for the year ending March 31, 2011, and for capital expenditure to be about $1.2 billion.
It said consolidated operating revenue and operational EBITDA of the group would be impacted by exchange rate movements in the Australian dollar.
‘‘If the Australian dollar had been stable from the same quarter last year, operating revenue would have increased by five per cent and operational EBITDA would have been up by six per cent,’’ the company said.
Optus said its mobile service revenue grew 11% in the quarter while mobile EBITDA was up 11%, matching revenue growth momentum.
"With its compelling array of smartphones and innovative service offerings, Optus gained 190,000 new mobile and wireless broadband subscribers, bringing Optus’ total mobile base to 8.69 million.
"Postpaid customers now comprise 50 per cent of the total base, up 3 percentage points from a year ago.
"The number of Optus 3G subscribers increased to 4.17 million, including a base of 994,000 wireless broadband subscribers.”
"In Consumer Fixed, Optus’ on-net strategy delivered on-net revenue growth of 5 per cent and EBITDA growth of 10 per cent. Total on-net broadband customers grew 5 per cent to 926, 000," the company said.
Singtel shares fell 1c to $2.46 yesterday.
And the worsening health of the American housing sector has reached out to bite the share price of James Hardie Industries.
The company’s shares fell more than 6% yesterday after management confessed that the US housing sector’s outlook had become more clouded.
The shares fell 7.4% or 46c to $5.70.
"The recovery in the US residential housing market remains disappointing and fragile," said James Hardie chief executive officer, Louis Gries said in a statement to the ASX.
"Following the expiry of the US government tax credit incentives at the end of April 2010, the gradual recovery of US residential construction, which had been apparent in the first four months of calendar 2010, stalled.
"At 549,000 units, annualised sales of new homes in June 2010 fell to their lowest level since April 2009, and were the second lowest since 1963.
"Factors such as lower mortgage application rates and construction volume and weak builder sentiment, reinforce the continuing weakness in the US housing market."
Hardie had said in its full year results issued several months ago "Analysts remain confident that the US housing market will continue to improve in fiscal year 2011.
"However, severe challenges remain, including constrained credit conditions that are restricting the availability of finance for prospective buyers and developers, a weak employment market, and a continuing supply of foreclosed homes."
Those challenges, and the ending of the tax credit, weak demand, despite falling interest rates and rising foreclosures, have combined to push the US housing sector (new and used) to the brink for the second time in three years.
Yesterday’s remarks by the CEO reminded local investors that while Hardie moved back into the black in the latest quarter, it’s the future of the US housing sector that will drive the fortunes of this company, and the share price.
James Hardie reported net profit of $US104.9 million in the three months to June 30, up from a loss of $US77.9 million in the first quarter o
