- Despite currency headwinds, SingTel reported higher FY24 (Apr 2023 to Mar 2024) underlying net profit (+10% y-o-y), driven by increased contributions from regional associates and ongoing cost optimisation efforts. Backed by a lush FY25 dividend yield of 6.8%, we maintain BUY with SingTel's target price of S$2.99.
Stable FY24 results.
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- The softer revenue and EBITDA were due to the deconsolidation of Trustwave and an appreciating Singapore dollar against regional currencies. Excluding Trustwave and on a constant currency basis, FY24 revenue would have grown 0.4% y-o-y while EBITDA would have softened by only 1.1% y-o-y.
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Revised dividend policy.
- SingTel announced a final 2HFY24 dividend of 6.0 cents (2HFY23: 5.3 cents), implying a total FY24 core ordinary dividend of 11.2 cents (FY23: 9.9 cents) and dividend payout ratio of around 82%.
- Also, SingTel announced a new embedded value realisation dividend (VRD) policy starting FY24, paying out 3.0-6.0 cents annually. A FY24 value realisation dividend of 3.8 cents was declared, taking FY24 total dividends to 15.0 cents (FY23: 14.9 cents, inclusive of 5.0 cents special dividend) and a yield of around 6.3%. See SingTel's dividend dates.
- We understand that the VRD policy is expected to last 4-5 years.
Optus: Improved outlook.
- Read more at SGinvestors.io.