SingTel

SingTel: 3QFY15 results came in ahead of estimates, with a 11% y/y rise in net profit to $969.8m, boosted by strong mobile data growth and higher contributions from associates.

This brought 9MFY15 earnings to $2.8b (+3.2%) and revenue to $12.9b (+1.3%). Excluding FX effects and exceptional items, core net profit would have gained 5.2%.

For the quarter, revenue climbed 3.8% to $4.4b, underpinned by continued momentum in Australia (+7%) through strong customer gains and higher ARPU, as well as higher equipment sales and TV revenue in Singapore (+7%), but offset by a weaker AUD (-4.4%).

EBITDA margin tightened to 27.8% (-1.8bps), squeezed by higher customer acquisitions and re-contract costs in Singapore.

SingTel's consumer unit saw strong growth, driven mainly by Optus' mobile sales of A$1.5b (+9%), from higher prepaid (+8%) and postpaid (+1%) ARPU. Singapore's mobile segment crept up 2% to $533m on a 3% increase in customer pool, but offset by lower ARPU (-3%) due to lower voice roaming usage and inter-operator SMS.

Underperforming Group Digital Life continues to achieve scale through acquisitions and partnerships as revenue more than doubled to $118m (+128%), boosted by contributions from Amobee's investments in Adconion and Kontera. But the digital segment still incurs losses of $49m (+16%) from its investments and integration costs.

Regional mobile associates registered robust growth in its combined customer base to 543m (+9%) and pretax profit surged 28% to $646m, led by Indonesia's Telkomsel and India's Airtel.

Management has maintained its stable guidance for FY15. The counter has been outperforming after breaching past its $4.00 mark on recent broker upgrades and improvements in Optus.

At $4.15, SingTel trades at 14.6x EV/EBITDA and a forward yield of 4.1%, compared to M1's EV/EBITDA of 11.7x and 4.9% yield.