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Singtel’s annual profit halves due to US$2.3B impairment charge

Singtel reported a 64% decrease in annual net profit, citing a S$3.1 billion impairment charge mainly from its Australian arm, Optus. Excluding this, underlying profit rose 10% to S$2.26 billion, bolstered by increased contributions from regional associates like Airtel and Advanced Info Service.

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SINGAPORE: On Thursday (23 May), Singapore Telecommunications (Singtel) announced a significant restructuring of its financial outlook, reporting a 64% decrease in full-year net profit.

This decline was primarily attributed to a previously-anticipated S$3.1 billion (US$2.28 billion) impairment charge, primarily from its Australian subsidiary Optus, Singtel revealed in a press statement.

For the fiscal year ending in March, the company recorded a net profit of S$795 million, a substantial decrease from the previous year’s figure of S$2.23 billion, largely due to an exceptional loss totalling S$1.47 billion.

This loss was primarily composed of a non-cash charge, including a S$2 billion provision related to the goodwill of Optus and S$483 million for Optus’ enterprise fixed access network assets.

As a result of these charges, Singtel experienced a net loss of S$1.3 billion in the fiscal second half year, in contrast to a net profit of S$1.1 billion during the same period in the previous year.

The Australian Communications and Media Authority (ACMA) announced legal action against Optus on 22 May, the second-largest telecommunications provider in Australia.

This action follows a cyber attack suffered by Optus in September 2022, which impacted over 10 million customers, as well as a widespread network outage in November 2023.

In March, ACMA fined Optus A$1.5 million (approximately US$978,150) after discovering extensive breaches of public safety regulations concerning emergency services.

Despite these challenges, Singtel reported that underlying full-year net profit increased by 10% to S$2.26 billion when excluding impairment charges.

This growth was attributed to higher contributions from regional associates and increased interest income.

Additionally, on 23 May, Singtel unveiled plans to enhance shareholder returns by introducing a new “value realization dividend” (VRD) of three to six cents per share per annum, supplementing the core dividend.

This initiative aims to bolster shareholder returns over the medium term.

The directors have proposed a final dividend of 9.8 cents per share, comprising a core dividend of six cents and a VRD of 3.8 cents, a substantial increase from the 5.3 cents dividend declared in the previous year.

This brings the total dividend payout for fiscal 2024 to 15 cents per share, marking a remarkable 52% year-on-year growth.

Singtel noted that this marks the third consecutive dividend increase since the company’s strategic reset three years ago.

The introduction of the VRD is expected to raise the telco’s dividend yield to 6.3% based on the last closing price, up from approximately 4% previously.

The VRD is funded by excess capital generated from the group’s capital-recycling program, which includes S$6 billion in additional assets identified by Singtel for potential monetization over the medium term, in addition to the S$8 billion already recycled over the past three years.

This capital is intended to support growth initiatives, reduce debt, and facilitate the return of excess capital to shareholders through the value-realization dividend.

Yuen Kuan Moon, Singtel’s Group Chief Executive, emphasized the resilience of the company’s underlying performance despite challenging market conditions and significant currency fluctuations.

“Customer numbers and mobile service revenue at Optus improved while roaming revenue grew in Singtel Singapore, driving the overall growth momentum in mobile. NCS delivered strong EBIT growth and secured bookings of S$3 billion.”

He stated that by increasing the total dividend payout, the company aims to share its success with shareholders while demonstrating its commitment to creating sustainable shareholder value.

Regarding concerns about the lawsuit against Optus by the Australian regulator over the data breach, Yuen clarified during the May 23 results briefing that the S$3.1 billion charge was unrelated to the legal action.

He mentioned that it was premature to estimate the provisions required by the group in response to the lawsuit.

Michael Ventner, Optus’ Interim Chief Executive, also present at the briefing, confirmed that there have been no additional class action suits beyond the one initiated by the regulator.

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Outside of Sinkiepore any GLC,any papeegomen supported company will just die or made bankrupt Sing&tell is just one many others die or written off.The big talking WITCH is one overated bitch.

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In an ever transparent world, all larger than large institutions that carries it’s country’s namesake in one form or another, … far more is expected of them, which is only natural !!!

There’s no room or place to hide, if the shit hits the fan, owing to bad decisions or appointments or both, … simple as !!!

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Still paying sky high yet no improvement to the package. So when will this darn cult self serving Telco close shop!

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So when will Singtel Close down … Deep in cult. Charge skyhigh. When will this company close down and have a new Telco that wouldn’t go around using cult as service point! When?!?

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