SingTel - RHB Invest 2024-02-26: FX Rates & Misses From Associates; Keep BUY

• SingTel’s 9MFY24 results missed estimates, on a weaker showing from associates and FX weakness. We lower FY24-26F earnings forecast for SingTel to factor in FX effects and the lower associate contributions.
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• SingTel remains our preferred telco pick, with a 4% ESG premium factored into our target price.

3QFY24 Falling short.

• SingTel (SGX:Z74)'s 3QFY24 core PATAMI of S$560m (+2% q-o-q, flat y-o-y) brought 9MFY24 core PATAMI to S$1.7bn (+8% y-o-y), at 73% of our full-year forecast (consensus: 72%).
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• The deconsolidation of Trustwave’s losses helped to lift EBIT, which rose by 12.3% (9MFY24: +5.3%).

Weak spots in Singapore, strong NCS growth.

• The group’s Singapore mobile revenue ticked up by 1.8% y-o-y on stronger roaming traffic. Stiff competition at the lower end of the market, however, is putting pressure on ARPUs.
• Overall, its 3QFY24 Singapore revenue dipped 2.1%, with EBITDA down by 5% as corporate ICT spending stayed soft.
• NCS, a key growth engine, is benefitting from strong operating leverage – with EBIT up 31% in 9MFY24 as acquisition-type investments are now behind.

A$60m provisions for Australian outage,

• Read more at SGinvestors.io.

Singapore Research RHB Securities Research | https://www.rhbgroup.com/ 2024-02-26 SGinvestors.io

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