Singtel reports 2% decline in nine-month net profit to $2.55 billion

SINGAPORE: Singtel has announced a 2% year-on-year decline in net profit to $2.55 billion for the nine months ending 31 December 2024. The decline is primarily attributed to a lower exceptional gain of $680 million, marking a 26.1% decrease compared to the $1.2 billion gain recorded in the previous financial year.

Despite this drop in net profit, operating revenue remained stable during the period, even with the deconsolidation of Trustwave in October 2023. The company’s EBITDA (earnings before interest, taxes, depreciation, and amortisation) saw a 6.2% increase, driven largely by contributions from Optus and NCS.

However, Singtel’s net finance expense rose by 16%, which the company attributed to lower dividend income following the sale of its stake in Airtel Africa in December 2023.

Desite the slight drop in net profit, Singtel remains Singapore’s dominant telecommunications player. Last month, RHB estimated that Singtel’s return on invested capital (ROIC) will grow by 10% in FY2025.

The bank said that Singtel’s earnings before interest and taxes (EBIT) are expected to post low double-digit growth for the year, with H1 FY2025 seeing a 12.8% EBIT increase in its core Singapore and Optus units. Additionally, Singtel is on track to achieve $200 million in opex savings by the financial year’s midpoint, with RHB affirming its commitment to a mid-term capital recycling target of $6 billion.

This effort supports a variable realisation dividend (VRD), with $1 billion (6 cents per share) expected to be recognised in the next six months.