SINGAPORE (June 5): Singtel’s shareholders, having gotten used to the telco’s relatively generous dividends over the years, received an unexpected piece of news when its latest results were announced. For the FY2020 ended March, the company plans to pay a final dividend of just 5.45 cents per share, down from 10.7 cents in the previous few fiscal years. This will bring the total FY2020 dividend to 12.25 cents per share, versus 17.5 cents per share that was distributed in FY2019. Still, the dividend payout of 12.5 cents per share represents a payout ratio of 81% of Singtel’s FY2020 underlying net profit, or about $2 billion.
“This reduction in dividend payout is prudent to conserve financial headroom to cope with uncertainties in the current Covid-19 operating environment and the capacity to invest in 5G,” explained Singtel Group CEO Chua Sock Koong at the company’s results briefing on May 28.
There is no doubt that the Covid-19 pandemic has hit Singtel hard, given travel and movement restrictions in its markets have caused a “significant reduction in roaming and prepaid revenues”.