SingTel - UOB Kay Hian 2024-02-26: Soft 3QFY24 Results In Line; Forex Movements Continue To Affect Performance

• For 9MFY24, SingTel reported a higher underlying net profit (+7.4% y-o-y), driven by higher contributions from its growth engines. However, 3QFY24 was a soft quarter with net profit flat y-o-y, dragged by currency headwinds.
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• NCS continued its robust growth while margins for the Digital Infraco segment suffered from higher investment costs.

9MFY24 results in line.

• SingTel (SGX:Z74)'s 9MFY24 overall group revenue (-3.2% y-o-y), EBITDA (-2.4% y-o-y) and underlying net profit (+7.4% y-o-y) formed 71- 72% of our full-year forecasts, just within our expectations.
• The soft results were due to a muted 3QFY24, impacted by an appreciating Singapore dollar against regional currencies. Excluding currency movements and contributions from the recently deconsolidated Trustwave in 3QFY24, 9MFY24 underlying operating revenue (+0.9% y-o-y), EBITDA (-0.3% y-o-y) and net profit (+10.7% y-o-y) would have performed better y-o-y, driven by higher contributions from SingTel’s growth engines (NCS and Digital InfraCo).

Soft 3QFY24.

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• Excluding currency movements and Trustwave, 3QFY24 EBITDA (+0.9% y-o-y) and underlying net profit (+1.5 y-o-y) grew. Also, it was noted that 3QFY24 pre-tax profits from regional associates fell 8.7% y-o-y, dragged largely by Airtel (-15.9% y-o-y) and Telkomsel (- 14.9% y-o-y).
• Excluding a S$80m currency hit from the depreciation of the Nigerian Naira, SingTel's 3QFY24 underlying net profit would have grown by around 7-8% y-o-y.

Optus: On the road to recovery.

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Chong Lee Len UOB Kay Hian Research | Llelleythan Tan Yi Rong UOB Kay Hian | https://research.uobkayhian.com/ 2024-02-26 SGinvestors.io

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