Why analysts aren't greatly impressed by SingTel's "so-so" 3Q14 income

Digital Life losses are worsening.

According to Maybank Kim Eng, SingTel’s 3QFY3/14 net profit rose 5.5% YoY but fell 1.5% QoQ to SGD873m. Net of exceptional charges, underlying net profit rose by 4% YoY and 3% QoQ to SGD910m.

Here's more from Maybank Kim Eng:

The exceptional charges of SGD37m included SingTel’s share of Bharti’s exceptional tax charge of SGD17m, its share of Globe’s accelerated depreciation of SGD8m and an investment impairment charge of SGD14m by SingTel’s venture capital arm Innov8.

EBITDA margin rose 2ppts to 29.6%, mainly driven by better margins in Australia.

Not altogether bad but not great either. It was a decent quarter for SingTel as it was able to grow its PATMI despite the weakness of the Indonesian rupiah and Australian dollar. Most of the increase in the bottom line came from mobile and pay TV growth in Singapore, higher voice rates for Bharti Airtel (EBIT up a strong 36% YoY even after a 12% fall in the Indian rupee) and strong cost control in Australia. Digital Life losses continued to widen, biting off almost 3% from group EBITDA.

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