Singapore Telecom 02 (Feb 12 - Dec 24)

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Singtel posts 26% fall in 4Q20 earnings; FY20 earnings plunge 65% to $1.08 bil on Airtel’s exceptional charges
https://www.theedgesingapore.com/capita ... al-charges

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Singtel's Indian unit divests 2.75% stake for $1.63b
https://sbr.com.sg/telecom-internet/new ... stake-163b

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Singtel posts record lowest earnings in FY2020; cuts dividend payout due to Covid-19 worries
https://www.theedgesingapore.com/capita ... -due-covid

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Carlyle to acquire 25% stake in Bharti Airtel’s data centre business for US$235 mil
https://www.theedgesingapore.com/news/m ... rti-airtel’s-data-centre-business-us235-mil

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Singtel to book another $911 million in charges from Bharti Airtel stake
https://www.theedgesingapore.com/news/t ... rtel-stake

[winston]

not vested

Pick up the call on Singtel

by Samantha Chiew

Although things are looking rather gloomy for Singtel, CGS-CIMB is keeping its “buy” call on the stock with an unchanged target price of $3.40.

On July 30, Singtel announced that its 31.9%-owned associate in India, Bharti Airtel, booked some $911 million in exceptional charges for 1QFY21. This comprises additional provisions for licence fee and spectrum usage charges pursuant to the Indian Supreme Court’s decision on the Adjusted Gross Revenue matter and tax-related charges.

But, Singtel will book a $550 million gain on dilution from Bharti Telecom's 2.75% Bharti stake sale in May.

In an Aug 11 report, lead analyst Foong Choong Chen says, “These will affect Singtel’s 1QFY21 reported net profit (likely to be announced on Aug 13), but will have no impact on its core net profit and cash flows.”

However, 1QFY21 core net profit is still expected to drop by 15-17% to $480-490 million, based on Singtel’s associates’ reported results and the analyst’s projections for Optus and Singtel’s operations in Singapore.

Covid-19 likely hit the consumer and enterprise businesses in Singapore (including Digital Life) and Optus, while NBN (Australia) migration revenue may have been lower.

On the other hand, 1QFY20 was boosted by a $55 million one-off gain from pre-IPO investment in Airtel Africa, which will be absent in the upcoming results.

“1QFY21 core net profit may form 19-20% of both our and Bloomberg consensus’ FY21 estimates, dragged down by weak Telkomsel, Singapore (bigger Covid-19 impact) and Bharti (slower narrowing of losses) contributions,” adds Foong.

On a q-o-q basis, Singtel’s net profit is expected to drop 17-19%.

“Besides Covid-19 and lumpy withholding taxes on associate dividends (the bulk is usually booked in 1Q), we estimate contribution from Telkomsel falling a substantial 21-23% q-o-q on lower revenue and higher costs,” says Foong, who feels that Telkomsel as Singtel’s largest earnings contributor (36% of FY20 core net profit), is a major disappointment for 1QFY21.

Meanwhile, the negative contribution from Bharti may not have improved much q-o-q, based on its reported results.

Separately, Singtel on July 30 saw its chairman Simon Israel step down as chairman and director of the board. He was then succeeded by chairman-designate Lee Theng Kiat.

Although a weak 1QFY21 may signal that y-o-y earnings recovery could be delayed by several quarters, Foong remains positive on the stock as it may chart improved earnings q-o-q in the later part of FY21, which could act as a potential re-rating catalyst.

Source: The Edge

https://www.theedgesingapore.com/capita ... -singtel-0

[winston]

not vested

Singtel (ST SP) - Covid-19 weighs on key markets

Singtel’s 1QFY21 business update came in below expectations.

EBITDA fell 24.2% YoY to S$897m, comprising 20.1% of our full-year forecast.

On the consumer front, reduced travel and lower footfall in retail stores, put a dent on roaming and prepaid mobile revenue and equipment sales especially in Singapore and Australia.

Group Enterprise saw operating revenue fall 4.5% YoY to S$1.4b, with certain ICT projects being deferred or delayed.

We are encouraged by Airtel’s lower net operating loss due to higher mobile ARPU in India with the price up last December, and this has mitigated declines from other regional associates.

We note from Airtel’s earnings that its ARPU has increased 2% QoQ to Rs 157; management did not provide a timeline for further tariff hikes but has reiterated that it believes ARPU needs to move up to Rs 200 and eventually to Rs 300 for a sustainable business model.

Despite this soft set of results, we remain constructive on Singtel as its valuations are not demanding, while FY21F yield of 5.3% should help cushion further downside.

We cut our EPS assumptions for FY21 and FY22 by 6.5% and 4.8% respectively, and we bring our FV estimate down from S$3.24 to S$3.08. Maintain BUY.

Source: OCBC

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Singtel reports 24% decline in EBITDA to $897 mil, registers net exceptional charge of $364 mil in 1Q business update
https://www.theedgesingapore.com/news/r ... 364-mil-1q

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Singtel JV company sells telecommunications towers for $950 mil
https://www.theedgesingapore.com/news/c ... rs-950-mil

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Singtel is back in the black in 1H with earnings of $466.1 mil
https://www.theedgesingapore.com/capita ... s-4661-mil