SingTel flags macro-economic headwinds into 2023 despite upbeat H1 growth

8:02 pm Wednesday, November 09th, 2022

(Reuters) -Singapore Telecommunications (SingTel) on Thursday said the company may have to bare the brunt of further macro-economic challenges that are expected to persist into fiscal 2023 despite posting a 23% jump in its first-half net profit.

On the back of challenges around high inflation and rising interest rates, the company emphasized that it is “well-positioned” to weather headwinds due to a stable financial position and cash generation.

SingTel, which is going through a strategic reset, said net profit for the half year ended Sept. 30 came in at S$1.17 billion, compared with S$954 million a year earlier.

The company’s performance was boosted by a strong turnaround in partly owned Bharti Airtel and an exceptional gain of S$1.01 billion ($720.25 million) from the partial divestment of its stake in Airtel.

Optus, the Australian unit of SingTel, flagged a massive data breach where up to 10 million customers’ data were compromised.

SingTel said a provision of A$140 million ($89.99 million) has been made and recorded for Optus as an exceptional expense for external independent review, third-party credit monitoring services, and the replacement of identification documents where needed.

Commenting on Optus and its operations, Chief Executive Yuen Kuan Moon said, “While the cyber attack has regrettably interrupted Optus’ momentum at the end of the first half, we expect Optus to come back stronger.”

SingTel, which stated its net debt has reduced by nearly a third from a year earlier, declared an interim dividend of 4.6 Singapore cents per share coupled with a special dividend of 5.0 Singapore cents per share.

Owing to a weaker Australian dollar and softer consumer sentiment, Singtel took on a non-cash impairment charge of S$1 billion on Optus’ goodwill. However, it ensured that the impairment does not affect the company’s cash flow or performance.

($1 = 1.5557 Australian dollars)

($1 = 1.4023 Singapore dollars)

(Reporting by Roushni Nair in Bengaluru; Editing by Krishna Chandra Eluri and Sherry Jacob-Phillips)