Singapore Telecommunications Ltd (Singtel) has reported a robust start to its financial year, with significant contributions from its Australian subsidiary, Optus, driving overall profitability.
For the first quarter ending June 30, 2024, Singtel’s net profit surged by 43% to S$690 million, a substantial increase from the previous year.
Optus: A Key Contributor to Singtel’s Success
Despite a 3.5% year-on-year decline in overall operating revenue, primarily due to lower ICT and project-based satellite revenues, Optus managed to bolster its profitability through effective cost management and strategic pricing initiatives.
The mobile service segment, which remains a cornerstone of Optus business, saw a 4.7% increase in revenue, driven by price adjustments in post-paid plans and a growing prepaid customer base.
This growth in mobile services helped mitigate the decline in other areas, leading to a 4.6% increase in EBITDA for the quarter.
Moreover, Optus EBIT skyrocketed by 58%, reflecting a combination of higher EBITDA and reduced depreciation and amortization charges, largely due to a lower asset base.
This remarkable EBIT growth underscores the effectiveness of Optus’ cost management strategies and its ability to navigate challenging market conditions.
Singtel’s Broader Performance
Singtel’s overall performance in the first quarter of FY2025 was bolstered not only by Optus but also by its other core businesses and growth engines.
The company’s EBITDA and EBIT rose by 8.4% and 27% respectively, largely driven by the deconsolidation of Trustwave, a former loss-making subsidiary.
In constant currency terms, Singtel’s underlying net profit increased by 8.7%, highlighting the strong operational performance across its core businesses, including Optus and NCS, its ICT subsidiary. NCS also reported strong bookings and continued expansion in its digital infrastructure, further contributing to Singtel’s positive financial results.
Outlook and Future Growth
Looking ahead, Singtel remains optimistic despite the challenging macroeconomic environment. The company is focused on sustaining the momentum of its core businesses while scaling its growth engines. In Australia, Optus aims to continue leveraging its recent price increases and key enterprise wins to drive future growth.
In conclusion, Optus strong performance has been instrumental in driving Singtel’s profitability in the first quarter of FY2025.
With a continued focus on cost management, strategic pricing, and investment in growth areas, Singtel is poised to maintain its upward trajectory in the coming quarters.
