Singapore Telecommunications (Z74) H1 2025 earnings summary

Executive summary

• Underlying net profit grew 6% year-over-year, with EBIT (excluding associates) up 27%, reflecting strong operational performance despite currency headwinds and lower exceptional gains.

• Significant EBIT growth at Optus (up 58%) and NCS (up 40%), with value realization from the amalgamation of GULF and increased AIS & Intouch stakes by S$2.5B.

• Interim dividend increased 35% to 7.0 cents per share, totaling S$1.16 billion, reflecting active capital management.

• Regional associates generally performed well, though Telkomsel in Indonesia faced competitive pressures and currency headwinds.

• Net profit after tax for H1 FY2025 was S$1,238.4 million, down from S$2,140.6 million year-over-year, mainly due to lower exceptional gains and higher finance costs.

Financial highlights

• Operating revenue was S$6.99B, stable year-over-year; EBITDA rose 9% to S$1.95B; EBIT (ex-assoc) up 27% to S$0.74B.

• Underlying net profit reached S$1.19B, up 6%; reported net profit S$1.23B, with prior year including a S$1.2B exceptional gain.

• Interim dividend of 7.0 cents per share declared, up from 5.2 cents, with a total payout of S$1.16 billion.

• Ordinary dividends increased by 35% year-over-year; dividend policy remains at 70%-90% of underlying profits, plus a value realization dividend.

• Regional associates' PAT was S$0.82B, down 4% due to currency headwinds.

Outlook and guidance

• FY25 EBIT growth (ex-associates) expected in high single to low double digits; cost savings targeted in low double digits.

• Regional associates' dividend forecast at S$1.1B; value realization dividend of 3-6 cents per share.

• H2 focus on EBIT improvement, enterprise growth, mobile price increases in Australia, and scaling growth engines.

• Continued focus on executing the ST28 strategy, emphasizing operational performance and active capital management.

• Several capital recycling projects are planned for the second half, aiming to support future dividends.