SingTel - Maybank Research 2023-11-09: FX Headwinds Linger; 1H24 Underlying PATMI Missed Expectations

• SingTel (SGX:Z74)'s 1H24 PATMI of S$2.14b (+83% y-o-y) exceeded our/consensus expectations, achieving 89% of FY24 forecasts. The increase was mainly due to a non-cash dilution gain (S$1.21b) from a reduction in SingTel’s effective equity interest in Telkomsel. Excluding this, underlying PATMI rose 12% y-o-y to S$1.12b, at 47% missed our/consensus expectations.

Optus outage would affect consumer confidence

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• Optus says its network has been fully restored and preventive measures have been implemented.
• Under the Australian Consumer law, when the network has an outage, the consumer could be entitled to reimbursement of the service fees paid for the duration of the outage. Drawing from the previous outage in 2016, Telstra has offered an AUD25 credit to consumers and an AUD50 credit to businesses who were offline for an extended period of time.

Possible compensation of up to AUD400m

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• We think that Optus also faces the possibility of losing customers to Telstra, the nation's largest telco firm, and TPG Telecom due to their more favourable brand images.

Earnings visibility to protect shareholder value

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Kelvin Tan Maybank Research | https://www.maybank-ke.com.sg/ 2023-11-09 SGinvestors.io

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