Singtel stock gains support from stronger earnings outlook

Singtel reported stronger underlying earnings for the six months ended September 30 on Friday, November 13, while the absence of large one-off gains pushed reported net profit sharply lower. The Singapore Telecommunications filing on the Singapore Exchange identifies the reporting period and confirms the security under ISIN SG1T75931496.

The Business Times reported that underlying net profit rose 10 percent to 1.49 billion Singapore dollars from 1.35 billion Singapore dollars a year earlier. Reported net profit fell 55 percent to 1.54 billion Singapore dollars from 3.4 billion Singapore dollars, mainly because the previous year included 2.2 billion Singapore dollars of exceptional gains from the partial sale of Airtel and the Intouch-Gulf Energy merger.

Guidance rises on operating momentum

Singtel raised its fiscal 2027 guidance for operating-company earnings before interest and taxes to mid- to high-single-digit growth. The company had previously forecast low- to mid-single-digit growth. The Business Times said this was the second consecutive year in which Singtel increased the guidance at the half-year stage.

First-half operating-company EBIT rose 8.7 percent to 902 million Singapore dollars. Optus EBIT increased 13.7 percent to 322 million Australian dollars, NCS EBIT advanced 15.5 percent to 212 million Singapore dollars and Digital InfraCo EBIT grew 25.3 percent to 51 million Singapore dollars. These businesses provided the main operating support as Singtel continued to manage a mixed regional portfolio.

Group operating revenue climbed 6 percent to 7.3 billion Singapore dollars from 6.9 billion Singapore dollars. On a constant-currency basis, revenue growth was 1.4 percent, while underlying net profit growth was 16 percent. The comparison matters for investors because currency movements and prior-period disposals materially affect the reported figures.

Dividend and capital allocation

The board approved an interim dividend of 0.09 Singapore dollars per share, 10 percent above the 0.082 Singapore dollars paid a year earlier. The payout comprises a core dividend of 0.071 Singapore dollars and a value-realisation dividend of 0.019 Singapore dollars.

Management is also reviewing capital expenditure guidance of about 3 billion Singapore dollars and expects spending to come in below the initial estimate because of disciplined capital allocation. Singtel continues to seek a like-minded minority partner for Optus, but management indicated that it would not sell a stake at any price.

Singtel stock traded at 4.11 Singapore dollars on the Singapore Exchange at 11:40 a.m. Singapore time on Friday, November 13, according to The Business Times. The market will weigh the improved operating outlook against the lower reported profit and the continuing reliance on gains from portfolio actions.

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