SINGAPORE (THE BUSINESS TIMES) - Singtel on Friday (May 27) reported $994.5 million in net profit for the second half of the year ended March 2022, up more than 10 times from $87.6 million for the same period a year ago.
The bottom line growth came despite lower operating revenue, as the group's exceptional items turned profitable from its loss booked the previous year.
Operating revenue for the second half of financial year 2022 fell 6.5 per cent to $7.69 billion, from $8.22 billion the previous year. This was mainly due to lower sales of equipment as well as a decrease in revenue from its mobile, data and Internet, fixed voice and pay-television segments.
Exceptional items for the half-year period reversed into a profit of $295.5 million compared with a $1.14 billion loss the previous year, as the group recognised a net gain of disposal from its sale of 70 per cent of shares in Australia Tower Network.
Overall exceptional losses for the half year also significantly narrowed to $521.4 million, from $1.25 billion in the second half of financial year 2021, as a result of lower impairments.
For the full year ended March 2022, net profit stood at $1.95 billion, about 2½ times up from a net profit of $553.7 million in financial year 2021, due to a net exceptional gain compared with a net exceptional loss last year.
Operating revenue fell 2 per cent to $15.34 billion to reflect lower National Broadband Network (NBN) migration revenue, as well as the continued impact of Covid-19 and challenges in Singtel’s carriage business.
Singtel said operating revenue was stable, excluding NBN migration revenue and Jobs Support Scheme credits, as it saw strong growth in its mobile service segment in Australia.
According to the group, underlying net profit for the fiscal year improved 11 per cent to $1.92 billion, mainly lifted by its subsidiary Bharti Airtel’s “resilient turnaround”.
Singtel’s board has proposed a final dividend of 4.8 cents per share. Together with its interim dividend of 4.5 cents per share, this brings the group’s ordinary dividends for financial year 2022 to 9.3 cents per share or a total of $1.5 billion.
In its outlook, Singtel said it expects to benefit from the recovery in international travel as borders continue to reopen.
It estimates dividends from regional associates to be approximately $1.1 billion, and its capital expenditure to be around $2.6 billion - comprising A$1.7 billion (S$1.66 billion) for Optus and $0.9 billion for the rest of the group.
“This reflects the group’s multi-year growth investments in 5G networks, data centres and satellites, as well as digital transformation initiatives to enhance customer experience and efficiency,” said Singtel of its capital spending.
The counter ended Thursday up nine cents or 3.4 per cent at $2.73, after spiking as much as 4.5 per cent to hit an intra-day high of $2.76.
Its share price movement came after the Economic Times reported that Singtel had initiated talks with Bharti Airtel chairman Sunil Mittal to potentially sell a “small” part of its holding in the Indian telco to the Mittal family.
Addressing the issue in a separate bourse filing on Friday morning, Singtel clarified that the group had been a strategic investor in Airtel “for decades”, and emphasised that the Indian telco remains a core investment in the group’s international portfolio.
“As for the media hearsay, we do not comment on market speculation and abide by market disclosure rules pertaining to material transactions,” said Singtel in its statement.
The group added that it has taken “proactive steps to illuminate the value of (its) portfolio of strategic investments” in its bid to “narrow the significant valuation gap which Singtel shares suffer from”, as per its ongoing strategic reset.
