SingTel - OCBC Investment 2024-04-30: Impairments Unlikely To Impact Dividends​​​​​​​

• 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

• - Read this at SGinvestors.io -
• 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

• - Read this at SGinvestors.io -
• 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

• Read more at SGinvestors.io.

OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2024-04-30 SGinvestors.io

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