SingTel (SGX:Z74)'s 3QFY24 earnings were within expectation. Currency was almost a 2% point drag to earnings. Associate contribution disappointed with an 8% y-o-y decline to S$374mil. Airtel Africa suffered a ~S$130mil mark-to-market losses from FX liabilities & translation impact following a massive depreciation of the Nigerian Naira during the quarter. Direct stake in Airtel Africa has been divested.
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The Positive
Early mobile price repair in Australia.
Optus postpaid ARPU of A$42 is the highest in more than four years. We believe price repair is underway. Competition, especially for entry-level price plans, has eased, and prices are edging higher.
Despite the network outage, mobile service revenue grew 3.4% y-o-y.
The Negative
Airtel Africa currency hit.
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A translation loss hit Africa operations due to the weakness in the Nigerian Naira.
Outlook
We expect mobile price recovery in Australia, India, Thailand, and Indonesia to drive earnings growth. An upside surprise in margins will stem from SingTel’s planned S$600mil reduction in core cost, largely in Optus.
Maintain BUY with unchanged target price of S$2.80
Read more at SGinvestors.io.
Above is an excerpt from a report by Phillip Securities Research. Clients of Phillip Capital may be the first to access the full PDF report @ https://www.stocksbnb.com/.
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