Singapore Telecommunications (Z74) Q1 2025 TU earnings summary

Executive summary

• Underlying net profit after tax (NPAT) rose 5.4% to S$603 million, or 8.7% in constant currency, driven by strong performance from Optus and NCS, but offset by lower contributions from Airtel and Telkomsel.

• Net profit increased 43% to S$690 million due to a net exceptional gain, reversing a loss in the prior year.

• EBIT for core business and growth engines increased by 11% and 7% year-over-year, respectively.

• Operating revenue declined 2.1% year-over-year, but EBITDA and EBIT grew 8.4% and 27% respectively, reflecting the deconsolidation of Trustwave.

• Growth in Optus and NCS offset lower regional associate contributions, with NCS securing strong bookings and Nxera expanding its data centre platform.

Financial highlights

• Operating revenue was S$3,413 million, down 2.1% year-over-year; EBITDA reached S$977 million, up 8.4%.

• EBIT (excluding associates) was S$382 million, up 27.4% year-over-year; underlying NPAT was S$603 million, up 5.4%.

• Regional associates' PAT was S$405 million, down 5% year-over-year, impacted by currency headwinds.

• EBITDA margin improved to 28.6% from 25.9% year-over-year.

• Exceptional items contributed S$88 million post-tax, mainly from dilution gains and asset sales.

Outlook and guidance

• FY25 EBIT growth (excluding associates) expected in high single to low double digits.

• S$0.2 billion in cost savings on track for Singtel SG and Optus; S$1.1 billion regional associates' dividend target on track.

• Value realisation dividend of 3-6¢ per share remains on track.

• Management remains optimistic about growth opportunities despite macroeconomic challenges, citing strong digitalisation and AI adoption trends.

• Execution of the Singtel28 growth strategy continues, with investments in data centres and digital infrastructure.