Singapore Telecommunications (Z74) H1 2024 earnings summary

Executive summary

• H1 FY24 net profit rose 83% to S$2.14b, boosted by an exceptional post-tax gain linked to Telkomsel’s IndiHome integration; underlying net profit increased 12% to S$1.12b.

• Revenue fell 3% to S$7.03b and EBIT was stable at S$580m; at constant currency, both would have risen 2%, led by NCS and Digital InfraCo.

• Underlying net profit growth reflected mobile, NCS and Digital InfraCo momentum, higher associate contributions and interest income from capital recycled.

Financial highlights

• Revenue was S$7.028b, down 3.2% reported and up 1.5% at constant currency; EBITDA was S$1.787b, down 4.8% reported and 0.5% at constant currency.

• EBIT excluding associates was S$580m, up 0.1% reported and 1.5% at constant currency; regional associates’ pre-tax earnings rose 2.8% to S$1.187b, or 8.5% at constant currency.

• Underlying net profit was S$1.121b, up 11.6% reported and 15.8% at constant currency; net profit reached S$2.136b versus S$1.170b.

• Exceptional items after tax were S$1.015b versus S$165m in the prior-year half; net profit growth was primarily driven by the Telkomsel-IndiHome integration gain.

Outlook and guidance

• FY24 outlook cites persistent inflation, high interest rates, slow growth and continued currency headwinds from Singapore dollar strength against the Australian and regional currencies.

• Regional associate dividends are expected to be S$1.3b; core capex is expected at S$2.1b, including A$1.6b (S$1.4b) for Optus and S$0.7b for the rest of the business.

• Planned data centre and satellite investment is S$0.5b, including a satellite to replace ST-2 by 2028; replacement investment will be fully funded by customer receipts ahead of vendor milestone payments.

• Priorities include improving core margins, scaling NCS and Digital InfraCo, and recycling capital to fund growth.