SingTel (SGX:Z74) expects to recognize an exceptional non-cash impairment of S$3.1b, which will result in a net loss in 2HFY24 and lower net profit for FY24 (financial year ended 31 Mar 2024).
The Impairment of S$3.1b
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S$2b on goodwill of Optus (due to weaker prospects in the enterprise market, higher cost of capital etc.),
S$340m for the Asia Pacific cyber security business (due to lower corporate spending) and
S$280m for NCS Australia (due to higher cost of capital).
But this is unlikely to impact SingTel’s payment of dividends
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SingTel’s dividend policy is to pay ordinary dividends at between 70% and 90% of underlying net profit and the payment of dividends will not be impacted by the exceptional provisions.
The company noted in its announcement that SingTel is on track to pay at the upper end of its dividend policy for FY24, barring unforeseen circumstances.
TPG Telecom & Optus signed network sharing agreement, subject to relevant regulatory approvals
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Above is an excerpt from a report by OCBC Investment Research. Clients of OCBC Securities may be the first to access the full PDF report @ https://www.iocbc.com/.
