Singapore Telecommunications (Z74) H1 2025 earnings summary

Executive summary

• Underlying net profit rose 6% year-on-year to S$1.19B, with EBIT (ex-associates) up 27%, reflecting strong operational performance despite currency headwinds and cost optimization.

• Significant EBIT growth at Optus (up 58%) and NCS (up 40%) year-on-year, driven by enterprise turnaround and digitalization demand.

• Amalgamation with Gulf Energy increased AIS & Intouch stakes' value by S$2.5B.

• 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.

• Regional associates generally improved, though Telkomsel in Indonesia faced competitive pressures.

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.

• Interim dividend of 7.0 cents per share declared, up 35% year-on-year, totaling S$1.16 billion.

• Ordinary dividends increased by 35% year-on-year; dividend policy remains at 70%-90% of underlying profits, plus a value realization dividend of 3-6 cents.

• Net cash from operating activities was S$2,138.1 million, down from S$2,265.3 million year-over-year.

• 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.

• Interim dividend raised to 7.0 cents per share, with a core dividend of 5.6 cents and a value realisation dividend of 1.4 cents.

• 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 in progress for the second half, aiming to support future dividends.