Singtel’s FY15 revenue saw a 2.2% increase to S$17,223m, or about 2.5% above our forecast, while reported net profit gained 3.5% to S$3,782m; underlying earnings was up 4.7% at S$3,779m, or about 1.3% above our estimate. Singtel has declared a final dividend of 10.7 S cents, bringing the full-year payout to 17.5 S cents, versus a total of 16.8 S cents in FY14; this represents a payout ratio of 74% of underlying net profit. We have bumped up our FY16 estimates by an average of 3.2% and have also introduced our FY17 forecast, which continues to incorporate modest low to mid single digit growth in revenue and EBITDA. However, our SOTP-based fair value remains at S$4.31, mainly due to lower market values of some of its listed associates. Still, we like the defensive nature of its business and decent forecast yield of 4.1%, and maintain our HOLD rating. We would be buyers closer to S$4.25 or better.
Decent FY15 results
Singtel reported 4QFY15 revenue of S$4338.9m, +5.1% YoY, while reported net profit climbed 4.5% to S$938.8m; underlying net profit was up 3.3% at S$950.0m. For the full-year, revenue rose 2.2% to S$17,223m, or about 2.5% above our forecast, while reported net profit gained 3.5% to S$3,782m; underlying earnings was up 4.7% at S$3,779m, or about 1.3% above our estimate. Singtel has declared a final dividend of 10.7 S cents, bringing the full-year payout to 17.5 S cents, versus a total of 16.8 S cents in FY14 – this represents a payout ratio of 74% of underlying net profit.
Guiding for modest growth in FY16
Going forward, Singtel expects consolidated revenue to growth by mid-single digit level and EBITDA to grow at low single digit level. Specifically, Singapore mobile revenue should rise by mid-single digit level; Australia mobile revenue by low single digit; Group ICT revenue to increase by mid-single digit. It also expects Amobee to turn in around S$350-400m of revenue; but Group Digital Life will still incur a negative EBITDA of S$150-180m. Singtel expects to spend around S$2.3b on cash capex and generate around S$1.5b of free cashflow. Dividend from associates should come in around S$1.1b in FY16.
Maintain HOLD with unchanged S$4.31 fair value
To account for the latest guidance, we opt to bump up our FY16 estimates by an average of 3.2% and we have also introduced our FY17 forecast, which continues to incorporate modest low to mid single digit growth in revenue and EBITDA. However, our SOTP-based fair value remains at S$4.31, mainly due to lower market values of some of its listed associates. Still, we like the defensive nature of its business and decent forecast yield of 4.1%, and maintain our HOLD rating. We would be buyers closer to S$4.25 or better.
Singtel reported 4QFY15 revenue of S$4338.9m, +5.1% YoY, while reported net profit climbed 4.5% to S$938.8m; underlying net profit was up 3.3% at S$950.0m. For the full-year, revenue rose 2.2% to S$17,223m, or about 2.5% above our forecast, while reported net profit gained 3.5% to S$3,782m; underlying earnings was up 4.7% at S$3,779m, or about 1.3% above our estimate. Singtel has declared a final dividend of 10.7 S cents, bringing the full-year payout to 17.5 S cents, versus a total of 16.8 S cents in FY14 – this represents a payout ratio of 74% of underlying net profit.
Guiding for modest growth in FY16
Going forward, Singtel expects consolidated revenue to growth by mid-single digit level and EBITDA to grow at low single digit level. Specifically, Singapore mobile revenue should rise by mid-single digit level; Australia mobile revenue by low single digit; Group ICT revenue to increase by mid-single digit. It also expects Amobee to turn in around S$350-400m of revenue; but Group Digital Life will still incur a negative EBITDA of S$150-180m. Singtel expects to spend around S$2.3b on cash capex and generate around S$1.5b of free cashflow. Dividend from associates should come in around S$1.1b in FY16.
Maintain HOLD with unchanged S$4.31 fair value
To account for the latest guidance, we opt to bump up our FY16 estimates by an average of 3.2% and we have also introduced our FY17 forecast, which continues to incorporate modest low to mid single digit growth in revenue and EBITDA. However, our SOTP-based fair value remains at S$4.31, mainly due to lower market values of some of its listed associates. Still, we like the defensive nature of its business and decent forecast yield of 4.1%, and maintain our HOLD rating. We would be buyers closer to S$4.25 or better.
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