UPDATE 2-SingTel annual profit more than halves on $2.3 bln impairment charge
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 23 2024
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Source: Yahoo Finance
- Singapore Telecommunications Financials:
- Reported a 64% drop in full-year net profit due to a S$3.1 billion impairment charge, mainly related to Optus.
- Excluding the one-time charge, underlying net profit rose by 10% to S$2.26 billion.
- Challenges Faced by Optus:
- Optus, Australia's second-largest telecom company, experienced setbacks like network outages, data breaches, and revenue declines.
- A non-cash charge of S$2 billion was provisioned on Optus' goodwill, with S$470 million related to fixed access network assets.
- Financial Outlook and Performance:
- SingTel forecasts high single-digit to low double-digit earnings growth for fiscal 2025.
- Revenues from Optus remained stable at A$8.06 billion, with efforts to rebuild customer trust showing progress.
- Dividend Policy and Capital Recycling:
- Proposed a final dividend of 9.8 Singapore cents per share and introduced a new value realization dividend of 3 to 6 Singapore cents per share annually.
- Identified around S$6 billion of assets for potential recycling to return excess capital to shareholders.
- Leadership Comments and Future Strategy:
- Optus interim CEO mentioned rebuilding customer trust after challenges and expressed confidence in the company's progress.
- SingTel aims to enhance core performance, scale growth engines, and maintain a lean cost structure for future growth.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
