Theedgedaily.com, 20 Nov 2008, Joan Ng
"For 2Q09 ended September, SingTel announced that pre-tax profit from its overseas associates had dipped — for the first time since FY2001 — by 26% to S$461 million (RM1.09 billion). That contributed to a 12% decline in the group’s underlying net profit to S$801 million.
Exchange rate movements were partly to blame for weak contributions from its key regional associates, Bharti and PT Telekomunikasi Selular (Telkomsel). As at end-September, the Indian rupee had declined 17.2% year-on-year (y-o-y) against the Singapore dollar while the Indonesian rupiah was down 7.9%. Meanwhile, the Australian dollar declined 5.9% against the Singapore dollar, affecting contributions from the group’s Australian subsidiary, Optus.
But even after stripping out the losses from the currency movements, SingTel’s pre-tax profit from associates would have fallen 16%. Was the weakness simply a reflection of the global financial crisis taking its toll on Asia’s fragile emerging economies? Or, is SingTel’s era of high growth, fuelled by its expanding regional footprint, now coming to an end? What can its CEO, Chua Sock Koong, do to revive its fortunes?"
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