Singapore Telecommunications (Singtel) has reported earnings of $2.14 billion for the 1HFY2024 ended Sept 30, 82.7% higher y-o-y.
Earnings per share (EPS) stood at 12.89 cents on a fully diluted basis.
The surge in earnings is boosted by an exceptional gain from associate Telkomsel’s integration of IndiHome. IndiHome is the largest fixed broadband provider in Indonesia.
Exceptional items for the period surged to $1.19 billion from $84.8 million in the corresponding period the year before.
Group operating revenue fell by 3% y-o-y to $7.03 billion, although on a constant currency basis, it would have been up by 2% y-o-y from NCS and Digital InfraCo. Both businesses offset the weakness in Singtel’s enterprise business across Singapore and Australia.
Other income rose by 70.6% y-o-y to $126.9 million.
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Profit on operating activities surged by 166.9% y-o-y to $1.77 billion from the spike in exceptional items.
Ebit stood stable at $580 million, but would have been up by 2% y-o-y on a constant currency basis as well.
Underlying net profit grew by 12% y-o-y to $1.12 billion but would have been up by 16% y-o-y if not for the strong Singapore dollar (SGD), which had a $42 million impact. The growth in Singtel’s underlying net profit was due to sustained growth momentum in mobile, NCS and Digital InfraCo, as well as higher contributions from its regional associates and interest income from capital recycled.
For the six-month period, Singtel has declared an interim dividend of 5.2 cents per share, representing 77% of its underlying net profit. The group has raised the payout range of its dividends to between 70% to 90% of its underlying net profit from the current 60% to 80% range.
As at Sept 30, cash and cash equivalents stood at $1.82 billion.
“Our underlying performance was resilient in the first half despite a challenging macroeconomic backdrop and inflationary pressures. Like the last financial year, we faced significant currency headwinds which impacted earnings. Nonetheless, we maintained positive momentum in NCS, Digital InfraCo and across our mobile business in Singapore and Australia despite the softness in the enterprise business. Our regional associates’ contributions also grew, boosted by improving market dynamics. With a simplified organisational structure and successful asset recycling, we’re in a stronger position to improve our return on invested capital and returns to shareholders,” says Yuen Kuan Moon, Singtel’s group CEO.
“Over the past two and a half years, we have made steady progress in our strategic reset, creating a strong foundation for the future. We’ve simplified our organisation so our businesses have greater agility to pursue growth, divested non-core digital businesses and strengthened our financial position with $5 billion received from the capital recycled. Our focus now is on rapidly scaling up our growth engines and we expect our new strategic partnership with KKR to accelerate the expansion of our regional data centre business in Asean,” he adds. “In our core business, we will continue to take costs out and improve efficiency. We will also actively support our regional associates as they drive growth particularly in the enterprise and fixed broadband space.”
In a separate statement, Optus CEO Kelly Bayer Rosmarin apologised for the outage that took place on Nov 8, saying that the group is "truly sorry" for letting down its customers.
"We will continue to work even harder to retain our customers' trust and to deliver great network experience, good value, and continued innovation," she says.
As at 9.17am, Singtel’s shares are trading 3 cents higher or 1.27% up at $2.39.
