Singtel Q4 profit falls 25.7% to $574m; dividend nearly halved to 5.45 cents

Singtel's earnings per share stood at 3.52 cents for the quarter.
Singtel's earnings per share stood at 3.52 cents for the quarter.ST PHOTO: LIM YAOHUI

SINGAPORE (THE BUSINESS TIMES) - Singtel has posted a 25.7 per cent drop in net profit to $574.4 million for its fourth quarter ended March 31, 2020, from $773 million a year ago.

This came as the telco took a net exceptional charge of $302 million for the quarter, mainly arising from Bharti Airtel's provision for a one-time spectrum charge, the company said on Thursday (May 28).

Earnings per share stood at 3.52 cents for the quarter, down from 4.74 cents for the preceding year.

Operating revenue for Q4 fell 10.2 per cent to $3.90 billion, from $4.34 billion a year earlier. This was due to lower mobile service and equipment sales revenues across Singapore and Australia.

Singtel's board has proposed a final ordinary dividend of 5.45 cents per share, almost half the 10.7 cents per share a year ago. This will bring the total dividend per share for the year to 12.25 cents, from 17.5 cents a year earlier.

"This reduction in dividend payout is prudent to conserve financial headroom to cope with uncertainties in the current Covid-19 operating environment and the capacity to invest in 5G," Singtel said.

Once approved by shareholders at an upcoming annual general meeting, the dividend will be paid on Aug 18, after books closure on Aug 6.

For the full year ended March 31, net profit was down 65.3 per cent to $1.07 billion, while revenue slipped 4.8 per cent to $16.54 billion, aggravated by the onset of Covid-19.

Singtel's full-year profit slumped to its lowest since 1993, according to Bloomberg data. In November last year, the telco had posted an unprecedented quarterly loss of $668 million for the three months to Sept 30.

 
 

Singtel group chief executive Chua Sock Koong said: "This has been a challenging year, given structural shifts in the industry, already soft economic conditions, adverse regulatory outcomes in India and the onset of Covid-19 in the fourth quarter.

"Travel and movement restrictions have led to significant reductions in roaming and prepaid revenues, and slowing economic growth has impacted business spend. Despite these challenges, we remained resilient and gained market share in mobile and fixed services in Singapore."

She added that it will be "some months" before the full impact of Covid-19 on the group's business can be ascertained, but said the lockdown has accelerated the take-up of its digital services by both consumers and enterprises.

As at 9.45am on Thursday, shares in Singtel were down $0.08 or 3.1 per cent to $2.54, following the release of its financial results.