Singtel guides for higher full-year Ebit after strong H1 results
The group is wary of potential Optus headwinds in the second half of FY2026
[SINGAPORE] Telecommunications giant Singtel on Wednesday (Nov 12) revised its operating companies’ (Opco) earnings before interest and tax (Ebit) guidance for FY2026 ending March 2026 to a wider range of “high single digit to low double digit”.
This is an upgrade from the group’s original guidance of “high single digit” at the start of the financial year.
The revision comes on the back of a strong first half Opco Ebit growth of 14 per cent in constant currency terms.
Its operating companies include Australian telco Optus, technology services provider NCS, data centre operator Nxera and the local operations in Singapore.
Speaking at a media conference accompanying Singtel’s results announcement for the first half-year on Wednesday, group chief executive officer Yuen Kuan Moon noted that the strong Opco Ebit performance is balanced against cost pressures, notably at Optus due to the “triple zero incident”.
In September, an emergency call outage in Australia resulted in the death of three people.
“We are spending more money to make sure that we improve the resilience (of Optus),” he said, noting that these costs will potentially affect the Opco Ebit in the second half of the fiscal year.
To support the operations of Optus, Yuen said that the group will be adding 300 call centre staff and relocating network support for Australia.
In addition, it is commissioning independent reviews to identify the root causes and preventive actions, while also increasing spending on network reliability and customer support.
Responding to questions from The Business Times, Yuen said that the Opco Ebit revision has yet to account for potential fines from the Australian government.
“It is too premature to talk about fines,” he said.
He added that Optus is in the midst of a senate inquiry in Australia, and the company is awaiting the results of the inquiry to have a “better clarity”.
Net profit nearly trebles
The group posted a 176.4 per cent increase in net profit to S$3.4 billion for the first half-year ended September, from S$1.2 billion in the year-ago period.
This was boosted by a net exceptional gain of S$2.1 billion mainly from the sale of a partial stake in Airtel in May and the Intouch-Gulf merger.
Excluding these one-off items, underlying net profit climbed 13.7 per cent to S$1.4 billion, from S$1.2 billion in H1 the year before.
The increase was driven mainly by improvements at regional associates Airtel and AIS and Opco NCS and Optus.
NCS’ Ebit rose 41 per cent, while Optus’ Ebit increased 27 per cent, compared with the year-ago period.
The group’s operating revenue dipped 1.2 per cent to S$6.9 billion in H1, from about S$7 billion in the prior year.
Singtel attributed this to the strong Singapore dollar. In constant currency terms, H1 revenue would have been up 1.9 per cent, the group said.
The board has approved an interim dividend of S$0.082 per share for H1, comprising a core dividend of S$0.064 per share and a value realisation dividend of S$0.018 per share. This is higher than the interim dividend of S$0.07 per share paid out the year before.
Yuen said: “While the macroeconomic outlook remains challenging, and the Optus business faces uncertainty, our business and geographical diversity is lending stability to the group’s performance.”
Shares of Singtel closed 2.2 per cent or S$0.10 higher at S$4.72 on Wednesday.
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