SingTel - UOB Kay Hian 2023-05-26: Improving Core Business Dragged By Weaker Overseas Contributions In FY23

• SingTel reported higher FY23 underlying revenue (+2% y-o-y) and PATMI (+7% y-o-y), driven by NCS, higher data roaming revenue and regional associates.
• Singapore consumer continues to experience ARPU uplift from the ongoing recovery in international travel and ongoing 5G migration.
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• Maintain BUY recommendation on SingTel with target price: S$3.15.

SingTel's FY23 results in line.

• SingTel (SGX:Z74)’s FY23 overall headline group revenue (-4.7% y-o-y), EBITDA (-2.3% y-o-y) and PATMI (+18.7% y-o-y) were within our expectations, forming 104%, 96% and 97% of our full-year forecasts.
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• On a constant currency basis and excluding Amobee and NBN migration contributions, SingTel’s underlying operating revenue (+5.1% y-o-y), EBITDA (+2.8% y-o-y) and net profit (+11.2% y-o-y) would have increased for FY23, implying improving business fundamentals.
• SingTel proposed a final 2HFY23 ordinary dividend of 5.3 cents (2HFY22: 4.8 cents), taking total FY23 ordinary dividends to 9.9 cents (FY22: 9.3 cents). Including the additional 5.0 cents from SingTel’s asset recycling initiatives, FY23 total dividends increased 60% y-o-y to 14.9 cents, with an annualised dividend yield of around 5.9%.

Singapore.

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Chong Lee Len UOB Kay Hian Research | Llelleythan Tan Yi Rong UOB Kay Hian | https://research.uobkayhian.com/ 2023-05-26 SGinvestors.io

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