The Motley Fool

Latest Update on Singapore Telecommunications Limited: Underlying Net Profit Fell 15%

On Wednesday, Singapore Telecommunications Limited (SGX: Z74), or SingTel, one of the three main telecoms in Singapore, released its 2019 fourth-quarter earnings update.

Let’s look at 10 things from the presentations we think are important to note.

  1. Sales revenue was up by 1.9% year on year at S$4.3 billion.
  2. Yet, earnings before interest, tax, depreciation, and amortisation (EBITDA) for the quarter fell 5.2% year on year to S$ 1.2 billion.
  3. EBITDA margin was down from 28.9% in the corresponding period last year to 26.9%.
  4. The group share of associates’ pre-tax earnings declined by 19.3% year on year to S$419 million.
  5. Net profit was up by 0.4% year on year to S$773 million. Excluding exceptional items, underlying net profit declined 15.0% year on year to S$697 million.
  6. Despite low net profit, free cash flow came in higher at S$1.1 billion as compared to S$800 million in the same period last year.
  7. As of 31 March 2019, net debt stood at S$9.9 billion, and gearing was at 24.9%. (Gearing ratio is defined as the ratio of net debt to net capitalisation. Net capitalisation is the aggregate of net debt, shareholders’ funds, and minority interests.)
  8. In the latest quarter, the Consumer and Digital Life segments saw revenue grew by 2.4% and 33.4%, respectively, compared to the same period last year. This was offset by 2.7% lower revenue for the Enterprise segment.
  9. SingTel is recommending a final ordinary dividend per share of 10.7 Singapore cents. This brings the total ordinary dividend per share for the year to 17.5 Singapore cents.
  10. Chua Sock Koong, SingTel’s group CEO, made the following comment:

“We have executed well to our strategy amid tougher industry, business and economic conditions. The fundamentals of our core business remained strong. We gained market share in mobile across both Singapore and Australia led by our product innovations, content and services that were well-received by customers. Our digital businesses Amobee and Trustwave continued to deepen their capabilities and to scale. Looking ahead, we will accelerate our digitalisation efforts to drive better customer experience and improve productivity and cost structure by transforming our processes.”

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.