SINGAPORE TELECOMMUNICATIONS LIMITED

Recommendation history

• FY 2024HoldHold: H1 was resilient, with underlying NPAT up 16%, regional associates’ PBT up 9%, and revenue and EBIT up 2% excluding FX, while the interim dividend rose 13% to S$0.052 per share. However, the S$600 million indirect-cost target has not yet demonstrated clear bottom-line flow-through, data-centre margins will weaken during the build phase until 2026, and the Optus outage creates near-term churn, remediation and regulatory risk.
• FY 2023HoldHold: Singtel delivered solid FY23 operating momentum, with core EBIT up 15%, underlying net profit up 7%, free cash flow above S$5 billion and total dividend up 60% to S$0.149 per share. However, the call provided no FY24 earnings guidance, Optus ROIC remains only about 2% versus an estimated cost of capital around 7%–7.5%, and much of the growth thesis still depends on execution in NCS and digital infrastructure.
• FY 2022HoldHold: Singtel delivered a strong H1 FY22, with underlying net profit up 17%, EBITDA up 16%, revenue up 3% and net profit more than doubling to S$954 million; the S$0.045 interim dividend and expected full-year payout in the upper half of the 60%-80% range support the income case. However, the growth thesis remains partly unproven: Singapore 5G adoption is only about 200,000 customers, enterprise 5G is still at the paid-trial stage, and associate performance remains exposed to competition, tourism recovery and rising 5G capex.
• FY 2021HoldSingtel remains a hold after a weak, highly uncertain H1: revenue fell 10%, EBITDA 19% and EBIT 44%, while underlying net profit declined 36%. ICT services grew 8% and 5G/digitalisation offer a credible medium-term recovery path, but Optus faces further NBN margin and migration-payment erosion, roaming remains depressed, and management provided no full-year outlook.
• FY 2018HoldHold. Singtel delivered strong cash generation and Optus share gains, but the earnings trajectory remains weak: underlying net profit fell 8% for FY18 and quarterly net profit dropped 18%, while FY19 guidance calls for only low-single-digit revenue growth and stable EBITDA. The 17.5 cents ordinary dividend is supported for two years, but management could not reconcile its $500 million cost-savings target with flat EBITDA guidance, and competitive pressure is still driving ARPU and enterprise-margin declines.
• 2009-09-01HoldHold: SingTel delivered strong current momentum—underlying net profit rose 19%, Singapore EBITDA increased 11% to S$556 million, Optus revenue grew 7% and regional associate earnings rose 32%. However, the investment case is less clean ahead: Singapore full-year EBITDA growth is guided only to low single digits, while iPhone/content costs, fixed-line pricing pressure, macro-driven corporate delays and aggressive Australian competition constrain margin visibility.
• —HoldHold: Singtel delivered 3% constant-currency revenue growth, but EBITDA fell 3% and underlying net profit declined 21% excluding prior-year divestment gains and other exceptional items; quarterly underlying profit fell 22%. The dividend remains attractive at 6.8 Singapore cents per share, a 77% payout, but the earnings trajectory depends on a second-half ICT recovery, uncertain NBN migration payments and stabilization in India, while Amobee and cybersecurity guidance were both reduced.