Singtel

Singtel: Announced qtrly results this morning, which were in-line with expectations. Dividends were maintained at last year's level (9c final + 6.8c interim), along with guidance for future dividends of 55-70%. Underlying qtrly net profit was $1.02b ($813.62m), which was slightly higher than $998m yoy but below the $1.06b surveyed by Reuters. SingTel's full-year net profit rose 4.3% to $3.99b but underlying net profit fell 3.3% to $3.68b. SingTel, which has stakes in various mobile operators in Asia, said rev was seen growing at a ‘low single digit level’ and Ebitda was expected to be stable. Earnings have been crimped in recent quarters by the $9b acquisition of African mobile operations by its Indian affiliate Bharti Airtel in 2010. SG was largely stable with 4Q12 margin boosted by lower mobile connection costs, however, Australia revenue was impacted by lower mobile termination rates while EBITDA benefited from seasonally lower costs Net profit for the fiscal fourth quarter ended in March rose 30% to $1.29b, bolstered by an exceptional net tax credit of $270m from an increase in the value of assets transferred to an associate. Kim Eng note that the year ahead is a transition year for SingTel. Earnings growth is likely to be driven by the cost side, but think it will be a challenge given the major structural changes being implemented. There is also unlikely to be any room to improve dividends. SingTel may also make more major acquisitions along the lines of the US$300m+ acquisition of Amobee. Further, SingTel is guiding for higher capex this year in SG and Aus.