UPDATE 2-Singtel to keep lid on costs after lowest annual profit in 16 years

* Q4 net profit almost flat at S$773 mln

* Full-year net profit S$3.1 bln vs est S$3.08 bln

* Sees cost savings of S$490 mln for FY2020 (Adds cost-saving target, share movement, and comments)

SINGAPORE, May 15 (Reuters) - Singtel on Wednesday posted its smallest annual profit in 16 years partly due to the intense competition faced by its regional associates in India and Indonesia, and the telecom operator said it would attempt to keep a check on its expenses.

Singapore Telecommunications Ltd, Southeast Asia's largest telco, reported a net profit of S$773 million ($565 million) for the quarter ended March, almost flat versus the year-ago period. Its underlying net profit, which excludes exceptional items, dropped 15% to S$697 million.

"Intense competition has affected the markets in India and Indonesia this past year," Singtel CEO Chua Sock Koong said in a statement. The company continued to be optimistic about the growth potential of its associates' markets, she added.

Analysts have previously said the company should seek to cut some costs to boost margins.

Singtel said it would use digitalisation and automation to improve customer experience and achieve a leaner cost structure, and expects the initiatives to deliver cost savings and avoidance of about S$490 million for fiscal year 2020.

The telecoms operator exceeded its cost-saving target and achieved S$541 million for fiscal year 2019.

The company reported a net profit of S$3.1 billion for the year ended March versus S$5.47 billion a year ago, which had included a divestment gain from the listing of its broadband unit NetLink NBN Trust.

Analysts had an average estimate of S$3.08 billion for the full-year net profit, according to Refinitiv data, which showed the results marked Singtel's lowest headline profit since its 2003 fiscal year.

Underlying net profit for the year dived 21% to S$2.83 billion.

OCBC analyst Joseph Ng said in a research note that Singtel's fourth-quarter results were below his expectations. He maintained his "buy" rating, but put its fair value estimate of S$3.30 under review.

The group's consolidated revenue is expected to grow by a mid-single digit and its consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) is forecast to be stable for the year ending March 2020.

The company's shares were trading nearly 1% lower at S$3.12 on Wednesday afternoon, while the broader market was almost flat.

($1 = 1.3687 Singapore dollars) (Reporting by Ambar Warrick and Aradhana Aravindan; Editing by Richard Pullin, Stephen Coates and Sherry Jacob-Phillips)