- NetLink NBN Trust (SGX:CJLU) recorded EBITDA of S$288.1mil (flat y-o-y) in FY25, broadly in line with our expectation. There was an adverse impact from lower interconnect pricing from April 2024 and lower ancillary revenue. FY25 EBITDA margin was 70.8% vs 71.1% in FY24, meeting management’s target of ~70%. NetLink Trust recorded FY25 revenue of S$407mil (flat y-o-y), broadly in line.
FY25 results were broadly in line, despite lower interconnect pricing from FY24.
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- The non-RAB segment revenue decreased by 4% y-o-y, primarily due to a 28% y-o-y decrease in Ancillary revenue, led by fewer work orders.
FY25 DPU of 5.36 cents met our expectations.
- FY25 NetLink Trust's distribution of 5.36 cents (+1.1% y-o-y) was in line with our expectations.
- NetLink Trust’s residential connections as of FY25 increased slightly by 1.1% y-o-y to 1,523.7mil from 1.507mil in FY24. However, non-residential connections slightly declined to 53.3mil compared to 53.5mil in FY24 due to churn between Requesting Licensees (RLs) with delayed terminations and RL consolidation.
- NetLink Trust’s net debt to EBITDA of 2.4x implies a big room to gear up above 4x in the long term, which should help to fund any new projects generating a 7.0% RAB return.
We expect NetLink Trust to trade towards 250bps from its current yield spread of 330bps.
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