Singtel's Q4 gains fall 25.7% on one-off charge at Indian unit

Singtel took a net exceptional charge of $302 million for the fourth quarter, mainly arising from India unit Bharti Airtel's provision for a one-time spectrum charge. ST FILE PHOTO
Singtel took a net exceptional charge of $302 million for the fourth quarter, mainly arising from India unit Bharti Airtel's provision for a one-time spectrum charge. ST FILE PHOTO

Final dividend nearly halved to 5.45 cents as a prudent step to conserve financial headroom

A one-off hit from its India unit sent net profit plunging at Singtel in the fourth quarter.

Earnings came in at $574.4 million for the three months to March 31, down 25.7 per cent from the $773 million recorded a year earlier.

This came as the telco took a net exceptional charge of $302 million for the quarter, mainly arising from Bharti Airtel's provision for a one-time spectrum charge, the company said yesterday.

Earnings per share stood at 3.52 cents, down from 4.74 cents for same quarter last year. Operating revenue fell 10.2 per cent to $3.9 billion, due to lower mobile service and equipment sales turnover across Singapore and Australia.

The firm has proposed a final dividend of 5.45 cents a share, almost half the 10.7 cents per share a year earlier. This will bring the total dividend per share for the year to 12.25 cents, from 17.5 cents last year.

"This reduction is prudent to conserve financial headroom to cope with uncertainties in the current Covid-19 operating environment, and the capacity to invest in 5G," Singtel said.

The dividend will be paid on Aug 18, after books closure on Aug 6.

Full-year net profit was down 65.3 per cent to $1.07 billion, while revenue slipped 4.8 per cent to $16.54 billion, aggravated by the onset of Covid-19.

Its full-year profit slumped to its lowest since 1993, according to Bloomberg data. Last November, the telco had posted an unprecedented quarterly loss of $668 million for the three months to Sept 30.

Group chief executive Chua Sock Koong said: "This has been a challenging year. Travel and movement restrictions have led to significant reductions in roaming and prepaid revenues and slowing economic growth has impacted business spend. Despite these challenges, we remained resilient and gained market share in mobile and fixed services in Singapore."

  • AT A GLANCE

  • OPERATING REVENUE: $3.9 billion (-10.2%)

    NET PROFIT: $574.4 million (-25.7%)

    FINAL DIVIDEND PER SHARE: 5.45 cents

She added that it will be "some months" before the full impact of Covid-19 on the group's business can be ascertained, but noted that the lockdown has accelerated the take-up of its digital services by both consumers and enterprises.

Singtel shares slid 4.2 per cent to $2.51 after the release of the results.

THE BUSINESS TIMES

A version of this article appeared in the print edition of The Straits Times on May 29, 2020, with the headline 'Singtel's Q4 gains fall 25.7% on one-off charge at Indian unit'. Print Edition | Subscribe