Sunday, 05 July 2020

Singtel’s finances take a beating citing COVID-19 and Airtel payouts

by Harry Baldock, Total Telecom
Thursday 28 May 20

The Singaporean telco’s profits fell to its lowest point in over two decades

Singtel’s financial report for the year ending this March have revealed net profit of just $754 million, down 65% on the previous year.   This massive decrease marks the Singaporean telco’s weakest financial performance in over two decades…

Singtel’s financial report for the year ending this March have revealed net profit of just $754 million, down 65% on the previous year.
 
This massive decrease marks the Singaporean telco’s weakest financial performance in over two decades, forcing it to slash its dividend by half as share prices dropped 4% today.
 
Singtel’s overseas businesses have been facing increasingly fierce competition in the past year, but it appears to be the combined effects of the coronavirus uncertainty and government regulations that have cost Singtel the most.
 
In the case of Singtel’s Indian interest, Bharti Airtel, the more than $1 billion fees imposed on the company by the Indian government over spectrum and licensing fees has put it under major financial strain. Singtel said it took a net exceptional charge of $213 million to as a result of these fees, which could yet increase as Airtel continues to battle with the government, alongside the cracking Vodafone Idea.
 
Meanwhile, in its Australian market, telco Optus has reported poor margins as a result of coronavirus uncertainty, meaning further bad news for Singtel. The potential sale of its Australian tower assets may be a possible solution, having been previously valued at around $1.32 billion. 
 
“It will be some months before the full impact of COVID-19 on our business can be ascertained,” explained Singtel CEO Chua Sock Koong.
 
Further sales could be on the cards for Singtel to raise funds for its domestic 5G rollout, having won a nationwide spectrum licence back in April, alongside a new joint venture by StarHub and M1. The licence includes an obligation to ensure nationwide coverage by 2025.
 
 
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