Singapore Telecommunications (Z74) H2 2022 earnings summary

Executive summary

• FY22 net profit rose 252% to S$1.949b, primarily on a net exceptional gain from the Australia Tower Network stake divestment; underlying net profit grew 11% to S$1.923b.

• Operating revenue and EBITDA each fell 2%; excluding NBN migration revenue and JSS credits, revenue was nearly flat while EBITDA and EBIT excluding associates rose 8% and 33%.

• Regional associates’ pre-tax earnings increased 21% to S$2.067b, supported by Airtel’s turnaround; proposed FY22 ordinary dividends total 9.3 cents per share, up 24%.

Financial highlights

• Revenue was S$15.339b, down 2% YoY; EBITDA was S$3.767b, down 2%.

• EBIT excluding associates was S$1.045b, down 9%; regional associates’ pre-tax earnings were S$2.067b, up 21%.

• Underlying net profit rose 11% to S$1.923b; net profit reached S$1.949b versus S$554m, with post-tax exceptional items of S$25m versus a S$1.179b loss.

• Excluding Optus NBN migration revenue and JSS credits, revenue was S$15.269b, down 0.4%; EBITDA rose 8% to S$3.693b and EBIT excluding associates rose 33% to S$971m.

Outlook and guidance

• FY23 expected to benefit from recovering international travel as borders reopen; macro and geopolitical uncertainty persists.

• Priorities include growing 5G share, developing ICT and digital services, integrating NCS investments, and expanding the regional data centre platform.

• FY23 regional associate dividends expected at ~S$1.1b; capital expenditure forecast at ~S$2.6b, including A$1.7b for Optus and S$0.9b for the rest of operations, excluding acquisitions and disposals.