SingTel will return nearly $4 billion to shareholders

Singapore Telecommunications, Southeast Asia's largest phone company, posted an unexpected jump in fourth-quarter profit on earnings at affiliates in India and Indonesia. The company will return S$4 billion ($3.96 billion) to shareholders.

Net income rose 61 per cent from a year earlier in the three months ended March 31 to S$1.68 billion.

Profit after stripping out a one-time gain of S$618 million was S$1 billion, which beat analysts' estimates.

Chief executive Lee Hsien Yang relied on Indian and Indonesian affiliates Bharti Airtel and PT Telekomunikasi Selular to sustain earnings growth. The regional affiliates gained 6.99 million subscribers in the quarter, more than the 4.3 million population of Singapore.

"We see exceptionally strong growth from its regional units like Bharti and Telkomsel," said Kirsty Watt, who helps manage Asian assets, including $150 million of SingTel shares, at Martin Currie Investment Management in Edinburgh, Scotland.

"Driving the group's growth engine is our regional mobile associates, especially Bharti and Telkomsel," Lee said.

Earnings at Sydney-based Optus, Lee's largest investment, dropped 20 per cent to S$168 million on sales of S$2.19 billion. "We are driving a tight and structured process to reduce our cost base," said Optus chief executive Paul O'Sullivan.

SingTel booked a one-time gain of S$618 million after it stopped accounting for the results of its Asian undersea-cable unit C2C.

- BLOOMBERG