SingTel - Likely A Decent Start To FY23
- SingTel (SGX:Z74) will release its 1QFY23 (1 Apr 2022 to 30 Jun 2022) business performance update on 24 Aug 2022. Based on its associates’ reported results and our estimates for its Singapore (SG) business and Optus, we estimate 1QFY23F core net profit grew 6-9% y-o-y to S$480m-490m, due to better associates’ earnings.
- SingTel's 1QFY23F core earnings per share (EPS) likely formed 19-20% of our FY23F forecast (19-20% of Bloomberg consensus’). While Bharti’s earnings were slightly soft, we see this as largely in line as SingTel’s earnings may rise more materially in 2Q-4QFY23F (roaming, Bharti, Telkomsel, sale of Amobee).
- We estimate 1QFY23F
- SG Consumer EBIT (earnings before interest and tax) slid 5-12% y-o-y on lower service revenue, but rebounded 51-63% q-o-q due to some depreciation normalisation, lower opex and roaming recovery.
- Group Enterprise EBIT (including NCS and Trustwave) may have eased 15- 20% y-o-y (down 4-9% q-o-q), due to lower margin in the carriage business, NCS’s higher staff cost and bigger Trustwave losses.
- Amobee to post LBIT (losses before interest and tax) of S$10m-15m, broadly stable y-o-y but narrower vs 4QFY22’s -S$28m.
- At Optus, we see Consumer EBIT falling 30-36% y-o-y as a drop-off in NBN migration revenue and higher depreciation more than offset mobile revenue growth (more rational competition).
- Regional associate profits (ex-SG, in S$ terms) grew 16-19% y-o-y, underpinned by a 4-fold jump in Bharti’s contribution to S$80m-85m and higher Telkomsel contribution, despite the sale-and-leaseback of its towers.
- We retain our forecasts, pending the release of SingTel’s business performance update.
Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.
FOONG Choong Chen CGS-CIMB Research | Sherman LAM Hsien Jin CGS-CIMB Research | https://www.cgs-cimb.com 2022-08-19 2022-08-19
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