SingTel - RHB Invest 2023-05-26: ROIC Trending Up; Keep BUY

• SingTel (SGX:Z74)'s FY23 results missed on AUD weakness, albeit. with the highest dividend payout since FY19.
• With FY23 return on invested capital (ROIC) rising to 8.3% (FY22: 7.3%), SingTel's management has set a new low double-digit target in the medium term.
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A miss on FX, albeit, good operational showing with ROIC at 8.3%.

• 4QFY23 core earnings of S$489m (-12.5% q-o-q, +4.4% y-o-y) brought SingTel's FY23 (Apr 2022 to Mar 2023) core earnings to S$2.05bn (+7% y-o-y), at 90% of our forecast (consensus: 93%) with the key deviation coming from the weaker AUD (-6% year-to-date).
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• The positive offsets were from associate contributions (+6.1% year-to-date) on Airtel’s outperformance and lower depreciation expense.
• A final dividend of S$0.053 (FY22: S$0.048) puts SingTel's FY23 full-year dividend at S$0.149 (including special dividend of S$0.05), the highest since FY19 with ordinary dividend of S$0.099 at the top-end of its 60-80% payout, ahead of our and market expectations. See SingTel's dividend date.

Roaming revenue roars back.

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Singapore Research RHB Securities Research | https://www.rhbgroup.com/ 2023-05-26 SGinvestors.io

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