Singtel Q1 profit soars 317.4% to S$2.9 billion on exceptional gains of S$2.2 billion

[SINGAPORE] Singtel on Wednesday (Aug 13) posted a higher net profit for its first quarter ended Jun 30, 2025, at S$2.9 billion, up 317.4 per cent from S$690 million in the year-ago period.

The bottom-line growth came as the telco recorded exceptional gains amounting to around S$2.2 billion, primarily from the sale of its partial stake in Airtel and the Intouch-Gulf Energy merger.

Meanwhile, Singtel’s underlying net profit rose 13.9 per cent on the year to S$686 million, from S$603 million.

Analysts said that the results were largely in line with market expectations.

“Singtel’s Q1 results indicate it’s likely to meet its reiterated full-year earnings before interest and taxes (Ebit) growth target largely due to reduced costs,” noted Chris Muckensturm in a Bloomberg Intelligence report.

The exceptional gains included a net gain of around S$1.5 billion from Singtel’s divestment of its 1.2 per cent stake in its India associate Airtel in May. It also included a net gain of S$746 million from the merger of Singtel’s former associate Intouch with Thailand-incorporated holding company Gulf Energy Development in April.

Other factors that contributed to Q1 improvements included the higher Ebit of its Australian unit Optus and its technology services arm NCS. Optus recorded a 36 per cent year-on-year rise in Ebit to A$133 million (S$111.4 million) driven by revenue growth and disciplined cost management, while NCS posted a 22 per cent year-on-year increase in Ebit to S$79 million from higher delivery margins.

DBS analyst Sachin Mittal said that the Optus-led growth is due to the 4 per cent year-on-year rise in mobile service revenue, which can be attributed to continuous tariff hikes for postpaid plans.

Muckensturm added that Optus’ profit momentum may accelerate as recent tariff hikes and network-sharing could revive top-line growth from a “sequentially flat” Q1.

Higher profit contributions from Singtel’s regional associates AIS and Airtel also led to the improved Q1 results, as the telco’s share of regional associates’ post-tax profits climbed 15.4 per cent on the year to S$468 million, from S$405 million. These were partly offset by lower net profit from its Indonesian associate Telkomsel, amid weaker mobile performance, as well as its Philippine associate Globe, amid weak consumer spending.

Airtel’s profit after tax rose 121 per cent. Singtel’s effective stake in Airtel is around 28.1 per cent – down from 29.4 per cent – after its partial stake sale.

CGS International (CGSI) analyst Prem Jearajasingam cited a recent news report by Reuters, which noted that the Mittal family behind Bharti Airtel is looking to place out approximately 0.8 per cent – worth S$1.2 billion at current prices – of the company’s shares.

The report stated that if the reported sale takes place, the Mittal family’s stake would decline to approximately 22 per cent.

This could “pave the way for Singtel’s own sell-down of (Airtel’s) shares”, he added, noting that Singtel has stated that it plans to pare down its stake in Airtel to match the Mittal family’s stake.

Its Thai associate AIS also posted strong operating performance, with growth in both its mobile and fixed broadband businesses.

“Any upgrade to regional associates’ dividend target of S$1 billion would hinge on tight control over macro and inflation risks,” Muckensturm added.

Operating revenue was largely stable at S$3.39 billion, compared with S$3.41 billion in the year-ago period, despite a 7 per cent depreciation in the Australian dollar.

Looking ahead, the group expects its data centre business to be a “bright spot” for financial year 2026 with the completion of Nxera’s data centres in Thailand and Singapore.

“We remain focused on solid execution and operating discipline to drive sustainable growth,” Singtel said.

DBS’ Mittal expects the Singapore telco business to benefit from the recent sector consolidation over the next nine to 12 months.

CGSI expects the recent proposed consolidation of Simba and M1 to have a “largely neutral” effect on Singtel group earnings in FY2026.

“However, unless the merged entity shifts its focus to cash flows and profitability, there is an increased risk to Singtel Singapore’s mobile revenues,” it added.

DBS maintains a “buy” for Singtel, with an unchanged target price of S$4.58. CGSI, on the other hand, maintained its “hold” call for the counter, with an unchanged target price of S$4.10.

Shares of Singtel closed on Wednesday 3.6 per cent or S$0.14 higher at S$4.06.