SingTel - UOB Kay Hian 2024-05-24: FY24 In Line, New Dividend Policy & Strategic Plan To Unlock Value

• 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.

• - Read this at SGinvestors.io -
• 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.

Chong Lee Len UOB Kay Hian Research | Llelleythan Tan Yi Rong UOB Kay Hian | https://research.uobkayhian.com/ 2024-05-24 SGinvestors.io

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