SingTel - Phillip Securities 2020-08-19: No Respite Expected In 2020

SINGTEL (SGX:Z74) | SGinvestors.io SINGTEL (SGX:Z74)

SingTel - No Respite Expected In 2020

  • SingTel (SGX:Z74)'s 1Q21 revenue and EBITDA were below expectations. Group revenue and EBITDA is down 14% and 24% y-o-y respectively.
  • Australia consumer experienced the sharpest contraction, EBITDA down almost 34% y-o-y. Loss in on-net broadband customers by 65% to NBN hurts margins.
  • Singapore mobile service revenue down 27%, in line with blended ASPs collapsing 27%,
  • FY20 final dividend was cut by 49% to 5.45 cents. No earnings guidance provided for FY21.
  • Maintain NEUTRAL with unchanged Target Price of S$2.44.
  • We are keeping our FY21e PATMI estimates unchanged. We do not see a turnaround in the results until international travel resumes materially for roaming revenue to recover. Australia needs to complete its NBN transition and remove the significant cost of running its existing broadband network to expect any recovery.

The Positive

Optus mobile was relatively resilient.

  • Australia mobile service revenue was relatively resilient, declining only 5.5% y-o-y at A$860mn. There was growth in the combined postpaid and SIM only plans subscriber base by 2.3% y-o-y.

The Negatives

Singapore mobile ARPU still slipping.

  • ARPU still weighed down by the absence of roaming revenue. Mobile blended ARPU is down to another record low of S$23 (-27.7% y-o-y) in 1Q21.

NBN pain for Optus.

  • Without NBN, Australia consumer EBIT fell an incredulous 82% y-o-y to A$41mn. Weakness was across all segments with broadband bearing the brunt, in our opinion. On-net broadband subscribers are down 65% y-o-y whilst burdened by high operating cost.


Paul Chew Phillip Securities Research | https://www.stocksbnb.com/ 2020-08-19
SGX Stock Analyst Report NEUTRAL MAINTAIN NEUTRAL 2.440 SAME 2.440