What's next for Singtel shares after posting S$445m net profit?

• Singapore Telecommunications (SGX: Z74) shares rallied to S$2.39 on Thursday (12 August 2021)
• The telco climbed out of the red in its Q1 results, posting a net profit of S$445 million
• This was attributed to an improved operating and business environment
• Looking ahead, Singtel expects to continue investing in its 5G and digital capabilities
• Interested in trading Singtel shares? Open an account with us to get started.

Singtel stock price: what’s the latest?

Singtel shares rose as much as 3.5% on Thursday, after the release of its first quarter results.

The telco posted a net profit of S$445 million for quarter ended 30 June 2021, up from a net loss of S$20 million a year ago.

Underlying net profit came in 31% higher at S$451 million, largely ‘due to the strong operating performance from Australia Consumer and net profit contribution from Airtel’.

The group’s operating revenue, EBITDA and EBIT also rose by 7.5%, 11% and 19% respectively, thanks to an improved operating and business environment as Covid-19 lockdowns and restrictions eased from last year.

The results were also lifted by a 11% appreciation of the Australian Dollar.

Meanwhile, EBIT at S$845 million surpassed CIMB analyst estimates of S$550 million.

Breaking down by segments, Singapore Consumer’s operating revenue increased 1.3% year-on-year despite price competition amid the entry of more mobile virtual network operators.

In Australia, the consumer business reported a ‘strong first quarter with good momentum and market traction’, Singtel said.

EBITDA for the segment grew by double digits to 12%, as a result of improved mobile postpaid ARPU, cessation of pandemic-related customer fee waivers, and rebates and lower bad debts provision.

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What’s the outlook for the rest of FY2022?

Group CEO, Mr Yuen Kuan Moon, said that Singtel remains ‘focused on investing’ in 5G and its digital capabilities, as they underpin recovery and growth efforts.

‘The strategic reset that we have set in motion, positions us to capitalise on this rising trend of digitalisation to support post-pandemic economic recovery and we continue to be disciplined in capital deployment and focused on delivering shareholder value,’ said Mr Yuen.

Covid-19 has also ‘underscored the importance and urgency of digital transformation for business resilience’, he added, stating that the business is ‘seeing good demand from enterprise customers for our services in digital, cloud, data centre and cyber security’.