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Singtel reports 23.1% y-o-y drop in net profit of $483 mil for 1QFY2024 due to net exceptional loss

Felicia Tan
Felicia Tan • 3 min read
Singtel reports 23.1% y-o-y drop in net profit of $483 mil for 1QFY2024 due to net exceptional loss
Singtel's Comcentre. Photo: Samuel Isaac Chua/The Edge Singapore
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Singapore Telecommunications (Singtel) Z74 -

has reported a net profit of $483 million for the 1QFY2024 ended June 30, 23.1% lower than its net profit of $628 million in the corresponding period the year before.

The decline was attributed to a net exceptional loss in this quarter compared to the net exceptional gain recognised last year. The net exceptional loss was mainly from Airtel, which recorded exceptional losses from a steep devaluation of the Nigerian naira against the US dollar (USD) as well as a fair value loss from its foreign currency convertible bonds compared to a gain in the last corresponding quarter.

The lower earnings were also attributed to a 9% decline in the Australian dollar (AUD). In constant currency terms, net profit would’ve been down by 20% y-o-y.

Meanwhile, underlying net profit rose by 14.5% y-o-y to $571 million on the back of lower net finance expense and higher share of profits from associates, mainly from Airtel, AIS and Intouch.

In constant currency terms, underlying net profit would’ve been up by 19.9% y-o-y.

Operating revenue fell by 2.7% y-o-y to $3.49 billion while ebitda fell by 7.7% y-o-y to $902 million. Both declines were attributed to the fall in the AUD. In constant currency terms, operating revenue would have been up by 2.5% y-o-y while ebitda would have declined by 3.1% y-o-y.

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Net finance expense fell by 54.3% y-o-y to $52 million due to a rise in interest income and a revaluation loss in the same quarter the year before. In constant currency terms, it would have been down by 49.7% y-o-y instead.

"Underlying net profit grew 15% in the first quarter despite prevailing macroeconomic challenges and currency headwinds. Our growth engines, NCS and Digital InfraCo executed well, roaming recovery stayed strong across our consumer and enterprise businesses, and we’ve lowered net finance expenses significantly with the proceeds from our capital recycling initiatives,” says Yuen Kuan Moon, group CEO of Singtel.

“While we saw better performances and higher contributions from our regional associates as market dynamics improved, increased competition and continued declines in legacy services impacted our core telco business in Singapore and Australia. Our focus on cost has helped to reduce some of the effects of the difficult operating environment,” he adds.

See also: NetLink NBN Trust reports 2HFY2024 DPU of 2.65 cents, up 1.1% y-o-y

“Going forward, we expect the integration of our core consumer and enterprise businesses which is underway in both Singapore and Australia, as the next step in our strategic reset, to optimise synergies, help deliver cost benefits and drive growth,” he continues.

Yuen is also positive on Optus’ prospects, seeing “more certainty” in Australia after Telstra and TPG’s decision not to appeal the rulings by the Australian Competition Tribunal and Australian Competition and Consumer Commission, which decided that the network sharing deal would not go through.

Shares in Singtel closed at $2.34 on Aug 18.

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