Singapore Telecommunications (Z74) H2 2023 earnings summary

Executive summary

• FY23 net profit rose 14.2% to S$2.225b; underlying net profit increased 6.8% to S$2.053b, or 11.2% on a constant-currency basis.

• Core businesses delivered S$168m EBIT growth, supported by mobile recovery, 5G adoption and ICT demand; regional associates’ pre-tax earnings grew 9.7% to S$2.267b.

Financial highlights

• Revenue was S$14.624b, down 4.7% reported and 1.7% at constant currency; excluding currency effects and revenue from NBN migration and Amobee, revenue rose 5%.

• EBITDA was S$3.686b, down 2.2% reported and up 1.0% at constant currency; EBIT excluding associates rose 6.4% reported and 8.1% at constant currency to S$1.112b.

• Free cash flow declined 15.2% to S$2.613b; net profit included S$172m of post-tax exceptional items, versus S$25m in FY22.

Outlook and guidance

• FY24 priorities: improve core margins, scale NCS and regional data centres, and continue capital recycling to fund growth.

• Regional associate dividends expected at S$1.3b; core capex forecast at S$2.1b, including S$1.4b for Optus and S$0.7b for the rest of the Group, excluding acquisitions and disposals.

• Additional FY24 investment of S$0.5b planned for data centres and satellites; ST-2 replacement investment is customer-funded ahead of vendor milestone payments.

• Ordinary dividends planned at 60%–80% of underlying net profit, barring unforeseen circumstances; policy subject to regular review.