SingTel - CGS-CIMB Research 2024-02-13: Cost Optimisation Efforts To Show In 3QFY24

• SingTel (SGX:Z74) will report 3QFY24F results on 23 Feb. See earnings calendar.

3QFY24F: Removal of Trustwave losses, weaker associate profits

• - Read this at SGinvestors.io -
• Share of pre-tax profits from SingTel's associates should have dipped 3% y-o-y due to weaker Telkomsel (reduced stake) and AIS (higher interest expenses) contribution, and strengthening of S$ against associated currencies.

Decent SG growth but pace of Optus recovery could be bumpy

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• growing NCS contribution supported by expansionary efforts and concerted cost optimisation, and
• absence of ~S$110m in Trustwave losses.
• For Optus, while our channel checks indicate that mobile price hikes were conducted by some industry players in Jan-Feb 24, we remain cautious on the pace of mobile segment recovery given potential churn and discounts offered following its network outage in Nov 23.
• Optus underwent a Senate inquiry, with findings set to report at end-Feb 24. Potential imposition of large fines/penalties remains an overhang on investor sentiment, in our view.

Healthy outlook of associates to drive FY25-26F earnings growth

• Read more at SGinvestors.io.

Kenneth TAN CGS-CIMB Research | LIM Siew Khee CGS-CIMB Research | https://www.cgs-cimb.com 2024-02-13 SGinvestors.io

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