[SINGAPORE] Eight hundred Singtel shareholders packed into a function room in the Sands Expo and Convention Centre on Tuesday (Jul 29), with questions for the management of the telco. The wide-ranging discussions included investor concerns about Optus, its Australian subsidiary.
Citing figures from Singtel’s annual report released on Jun 30, these investors had questions not only about the A$100 million (S$83.8 million) penalty that Optus had to pay for alleged sales misconduct; they also asked about its lagging profitability relative to its rivals, despite clocking a 55 per cent jump in earnings before interest and taxes (Ebit).
The scrutiny of Optus during Singtel’s 2½ hour long annual general meeting (AGM) highlighted the operational challenges faced by Optus, which also included the 2023 nationwide outage in Australia, and the series of reports by whistle-blowers and those with grievances.
Financial performance
Optus, the second-largest telco in Australia, posted earnings before interest, taxes, depreciation and amortisation (Ebitda) of S$1.94 billion for FY2025 ended Mar 31, 5.7 per cent higher than FY2024’s figure of S$1.86 billion, accounting for constant currency.
In a question submitted before the AGM, one investor noted that, compared to the pre-pandemic period, the company’s revenue and Ebit were now lower.
Singtel said in a written response that Optus’ Ebit has been hit by a combination of structural and market-specific factors that have reshaped the Australian telco landscape over the past few years.
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“That said, Optus is now on a recovery path,” it added, noting its 55 per cent rise in Ebit for FY2025.
Singtel expects Optus to be a key driver of the group’s Ebit. This will be supported by ongoing cost-reduction efforts, rational pricing in mobile and broadband sectors, and further streamlining of the product portfolio, it said.
However, some shareholders were still unconvinced, with one raising his concern about Optus being left behind by its competitors.
Singtel’s group chief executive officer Yuen Kuan Moon noted that Optus’ Ebitda margin was around 27 per cent – lower than the industry’s average of 30 to 33 per cent.
He added that Singtel’s management is looking at the capital expenditure needs for Optus to lift its performance, and that this would include exploring network and IT investments.
“We want to ensure that Optus is able to grow progressively and sustainably over time,” he added.
Controversy
While Optus’ financial performance has improved, shareholders wanted to know what steps Singtel would take to restore customer trust following the outage in Australia.
Singtel replied that doing so is an ongoing priority for management, and that “some improvements” in Optus’ reputation metrics have already been noted.
Shareholders also homed in on the Jun 18, 2025, penalty of A$100 million incurred over Optus’ alleged sales misconduct, specifically the selling of mobile phones and plans to vulnerable customers.
Asked about the fallout from the incident, Yuen said Optus is making ongoing efforts to reach out and support affected customers.
He added that changes have been made to the management team and to sales practices, and certain franchise stores have been taken back under Optus’ control.
One shareholder, referring to the latest group-wide sustainability report, asked the board to clarify the “disproportionately high volume” of grievances reports involving Optus. The report indicated that Optus accounted for more than half of all reported staff grievances and whistleblower reports.
In a written response, Singtel said that since Optus contributes to approximately half the group’s revenues, the proportion is reflected in related metrics, including whistle-blower cases.
Looking ahead
Singtel’s group chief financial officer Arthur Lang, responding to the questions raised, said whether it is revenue, Ebitda, Ebit, returns on capital, or cash flow, Singtel is working on improving these areas. He added. “We are confident, and we are very focused on making sure that Optus will continue to perform.”
Ten resolutions tabled on Singtel matters for the AGM were passed, with each garnering at least 93.1 per cent support. Among them, one concerned raising its directors’ remuneration to a maximum of S$4.9 million for FY2026, up from S$4.6 million for FY2025; three others related to the re-election of three directors.
Shares of Singtel closed down 1 per cent, or S$0.04, at S$4.03 on Tuesday.
