SINGTEL’S net profit for the third quarter ended Dec 31, 2023, was down 12.5 per cent to S$465 million from S$532 million in the same period a year ago.
On Friday (Feb 23), the telecommunications operator said the bottom line decline was due to a higher net exceptional loss mainly came from Optus and Airtel.
This included a provision for costs related to the recent outage in Australia, along with Airtel’s one-offs which mainly comprised a fair value loss from its foreign currency convertible bonds.
For these reasons, post-tax losses from exceptional items more than trebled to S$94 million from S$28 million in Q3 FY2023.
Operating revenue for the quarter declined 3.2 per cent year on year to S$3.6 billion in the absence of contributions from Trustwave, as it was classified as a “subsidiary held for sale”, as well as a depreciation in the Australia dollar.
The group’s earnings before interest, taxes, depreciation and amortisation (Ebitda) rose 2.6 per cent to S$935 million.
Excluding Trustwave’s contributions in Q3 of FY2023, underlying revenue fell 0.3 per cent while underlying Ebitda was down 0.8 per cent from adjusted figures in the same quarter the previous year.
In constant currency terms, the group said operating revenue and Ebitda were “stable” as growth in NCS and Optus helped to offset Singtel Singapore’s weaker performance.
Underlying net profit remained unchanged at S$559 million for the quarter, but was 1.5 per cent higher in constant currency terms.
“Our underlying financial results in the third quarter were stable despite a tough macroeconomic environment and persistent currency headwinds. NCS kept up its positive momentum with strong bookings, while Optus was supported by growth in the mobile segment,” said group chief executive Yuen Kuan Moon.
Yuen however, noted that Singtel continues to face “business pressures”, while scaling the group’s Nxera regional data centre business “has required investment costs”.
“While Airtel delivered a solid performance in India, currency depreciation from its African operations affected its contribution.”
For the first nine months of FY2024, Singtel’s revenue fell 3.2 per cent year on year to S$10.6 billion. Its Ebitda was down 2.4 per cent to S$2.7 billion, and net profit gained 52.9 per cent to S$2.6 billion.
The group said it remains on track to pay the upper-end of its dividend policy in FY2024, referring to its plans to pay ordinary dividends at between 70 to 90 per cent of its underlying net profit.
“We are confident that our strong balance sheet and our priorities to improve the operational efficiencies of our core business and scale our growth engines will drive long-term value and returns,” said Yuen.
Singtel gained S$0.02 or 0.8 per cent to S$2.39 at Thursday’s close.
