Singtel raises full-year guidance with 6-month profit of $3.4b, strong show from Australian unit Optus
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Singtel’s Australian unit Optus posted a 27 per cent jump in earnings before interest and taxes at A$283 million (S$241 million).
ST PHOTOS: GIN TAY, LIM YAOHUI
SINGAPORE – Telco group Singtel dialled in a strong report card for the first half of its 2026 financial year, which ended in September, posting a 14 per cent gain to $1.35 billion in underlying profits – earnings stripped of one-off or exceptional gains.
Its Australian unit Optus, still under a cloud of investigation following a call outage linked to three deaths, posted a 27 per cent jump in earnings before interest and taxes (Ebit) at A$283 million (S$241 million), spurred by growth in mobile use.
Optus’ revenue grew 2 per cent on higher postpaid and network-sharing revenues to A$4.09 billion over the same period in 2024.
Contributing to Singtel’s stronger bottom line, too, were its technology services arm NCS and its regional associates – India’s Airtel and Thailand’s AIS.
NCS handed in a 41 per cent jump in Ebit at $184 million, while the pair of associates helped its segment deliver $915 million in profits after tax, a surge of 16 per cent.
Counting one-off gains, Singtel’s net profit rose 176 per cent to $3.4 billion from $1.2 billion a year ago, bumped up by $2.05 billion from both the sale of its 1.2 per cent stake in Indian associate Bharti Airtel and the merger of its Thai associate Intouch Holdings with the Gulf Energy Development.
Singtel’s earnings are derived from its core operating units Optus, Singtel Singapore, NCS and Digital InfraCo, as well as dividends from its stakes in regional partners such as Airtel, AIS and Indonesia’s Telkomsel. InfraCo comprises data centre operator Nxera and artificial intelligence cloud business RE:AI.
Despite the troubles in Australia, group chief executive Yuen Kuan Moon said the group is raising its earlier guidance of high single-digit growth for Ebit in its core operations to between high single digits and low double digits for the year ending March 2026.
It is also lifting its forecast of regional associates’ contribution by $100 million, to $1.1 billion.
In a press briefing flanked by heads of his business units on Nov 12, Mr Yuen said prospects for Optus – which operates the second-largest of three networks in Australia – were improving before its September outage, and they are still good.
In the three months to September, Optus’ revenue was up 2 per cent, earnings before interest, taxes, depreciation, and amortisation (Ebitda) gained 7 per cent, and Ebit rose 27 per cent.
“So you see that prior to the outage, the momentum was actually very strong,” he said in the briefing held in the company’s boardroom.
It is premature to speculate if Optus would be fined, and an independent panel has been convened to find out the outage’s cause, he said. Optus triggered a 13-hour emergency services outage
Addressing questions on whether under-investment in the network had led to its failure, he pointed out that Optus had put A$33 billion into its network since 2002, of which A$9 billion was made in the last five years.
Singtel had also not withdrawn dividends from Optus in the past five years, and had injected cash into it in 2024 to renew its spectrum.
In its last two financial years, Optus devoted a higher percentage of its total revenues on capital expenditure, compared with its competitors Telstra and TPG, according to figures from Singtel.
Mr Yuen said: “Our investors always come and ask, ‘Why are you investing in a low-return business’, but we believe in the market.
“We believe that this market is worth investing in the long term, and therefore we continue to support the Optus board and management.”
While the company is not closed to the idea of divesting Optus, the focus for now is on rebuilding trust among Australians.
He said: “Definitely, there is some impact on consumer sentiments. Having an outage like that impacted the confidence of the Australians on Optus as a company, as a brand. The team in Australia would have to work very hard to rebuild the trust and the confidence.”
Optus has delivered about 6 per cent to the group’s underlying profits over the years.
On the business environment in Singapore, Mr Yuen added that Singtel supports consolidation, and has submitted its opinion to the Government, which is seeking views on Keppel’s proposed M1 sale to Simba. The deal has raised opposition from rival Circles.Life.
Counting mobile virtual network operators and internet service providers, there are more than 10 different players competing for business here. Two or three operators would be ideal, Mr Yuen said, as operators would be better able to generate better returns to reinvest in the network.
“As to whether Singtel is allowed to consolidate, I think this is a question for the regulator and not for us to answer,” he added.
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The unit is banking on rising demand for data sovereignty in the Asia-Pacific to help its Nvidia-chip powered data centres stand out against competitors. Enterprises and governments are increasingly requiring their data to be stored and processed within their country of origin.
“We also see NCS keeping up its business momentum on robust bookings,” Mr Yuen said, pointing to the unit making headway in enterprise and global expansion growth.
NCS made 6 per cent more in revenue of $1.5 billion and 29 per cent rise on Ebit margin after stripping a one-off settlement gain from a sub-contractor.
Business heads at the briefing cited synergies between their combined offerings of network connectivity, systems integration expertise and cloud infrastructure.
Singtel plans to pay an interim dividend of 8.2 cents per share, up 17 per cent from the same period in its last financial year.
Its shares rose 2.16 per cent to close at $4.72 on Nov 12.
