One of Singapore's biggest listings in years moved a step closer yesterday when Singtel confirmed it has hired three banks to prepare its wholly owned fibre broadband unit NetLink Trust for an initial public offering (IPO) before April next year.
Under structural separation rules laid down by the infocomm regulator, Singtel must divest itself of more than 75 per cent of NetLink Trust by that date.
The telco has appointed DBS, Morgan Stanley and UBS to advise on the share sale, it said during its earnings briefing yesterday.
Singtel added that it was too early to comment on the expected size or use of the IPO proceeds, but previous reports have put its value at US$2 billion (S$2.8 billion) - which would make it one of the biggest deals here in years.
IPO proceeds could go towards funding other growth opportunities, and a portion of anything above that could be returned to shareholders, Singtel said.
NetLink Trust designs, builds, owns and operates the passive infrastructure for Singapore's Next Generation Nationwide Broadband Network.
AT A GLANCE
SINGTEL'S NET PROFIT: $972.8 million (+2%)
REVENUE: $4.41 billion (-1.5%)
In the three months ended Dec 31, NetLink Trust's net profit contribution rose 42 per cent from a year earlier to $32 million, on a 12 per cent jump in operating revenue from increased fibre penetration in Singapore. It has 79 per cent of the residential wired-broadband market.
Overall, Singtel posted a 2 per cent rise in net profit to $972.8 million for the third quarter, despite intense competition in India and Australia, and investments in content and network expansion. A favourable currency translation impact of $16 million also helped lift the bottom line.
Excluding exceptional items, underlying net profit was up 4.2 per cent at $994 million.
Operating revenue in the three months to Dec 31 fell 1.5 per cent to $4.41 billion from a year earlier. If not for the mobile termination rate cuts in Australia, operating revenue would have risen by 3 per cent.
The group's consumer business revenue fell 3.7 per cent to $2.58 billion on a 9.8 per cent fall in takings from Australia. But Singapore consumer revenue was 3.5 per cent higher at $657 million on higher equipment sales and consumer home services boosted by increased fixed broadband and TV revenues.
Post-tax underlying profit contributions from associates rose 6.1 per cent in the third quarter to $508 million, as strong growth at Telkomsel, Globe and NetLink Trust made up for declines at Airtel and AIS.
Third-quarter earnings per share was 6.03 cents, up from 5.98 cents a year earlier. Net asset value per share was $1.65 as at Dec 31, up from $1.57 as at March 31.
Singtel shares rose four cents or 1.04 per cent to close at $3.88 yesterday after the earnings were announced.