NetLink Trust (SGX:CJLU)’s 1HFY26 revenue rose 1.1% y-o-y to S$207.1m, supported by higher ancillary project (+26.8% y-o-y) and co-location (+12.4% y-o-y) revenue, but was partially offset by weaker connections revenue.
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1HFY26 DPU up 1.1% y-o-y despite lower net profit
Net profit fell 10.2% y-o-y to S$43.5m, below expectations, and came in at 42% of our initial full-year forecasts. The decline was mainly due to higher depreciation and amortisation, primarily from the Seletar Central Office.
Despite lower earnings, an interim dividend of 2.71 Singapore cents per share was declared, up 1.1% y-o-y.
NBAP and segment connections grew but revenue was weighed by milestone rebates
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Residential connections remained influenced by plan upgrades and deactivations due to the Requesting Licensees (RL) clearing inactive or dormant lines. The decline in non-residential connections was mainly due to end-user churn between RLs.
Meanwhile, demand from mobile network rollouts supported growth in NBAP and segment connections. Despite higher connections, NBAP and segment connections revenue was down 5.6% y-o-y, mainly due to higher rebates for Point-to-Point connections after reaching specific milestones.
Management noted that the volume milestone rebates from one of the telcos are unlikely to remain a drag going forward. They do not expect other telcos to reach a similar target volume and trigger significant rebates in the near-term.
Raise fair value estimate to S$1.05.
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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/.
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