Singtel shareholders approve scrip dividend scheme even as outlook remains hazy

SHAREHOLDERS of mainboard-listed telco Singtel can now be paid in shares instead of cash, after a successful vote to include a scrip dividend scheme in the constitution.

The amendment was passed at an annual general meeting (AGM) on Thursday, even as the coronavirus pandemic hung over the group's outlook in the months ahead.

"Given the unprecedented disruption from Covid-19, we have not provided guidance on our outlook, capex and dividend for the current financial year," group chief executive Chua Sock Koong told shareholders at the AGM, which was delivered over live webcast.

"We will update the market when there are material developments and provide guidance when there is greater clarity in the operating environment."

Singtel most recently cut its payout for the financial year to March 31 to 12.25 Singapore cents a share, down from 17.5 cents the year before.

That's even as the telco expects provisions for bad debts to increase in line with an economic slowdown, according to a bourse filing aimed at addressing common shareholder questions.

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On how the Covid-19 pandemic has affected customers' ability to pay their bills on time, Singtel noted that prepaid mobile use has declined, while postpaid sales and collections are slower.

But regional associates are promoting the use of online channels to collect top-ups and bill payments, while economic recovery in regional markets offers uplift, the group said.

Singtel added: "The full impact of the pandemic will only become clearer as the economic consequences unfold. Meanwhile, our associates are pushing ahead with their digital transformation to navigate the uncertainties and position themselves for a digital-led recovery."

The company also reassured investors that its network and operations remain resilient, despite earlier workforce and supply-chain disruptions from the pandemic.

For instance, handset shipments to Singapore have recovered from delays at the start of the outbreak, while resources in Singapore and Australia helped to ease a labour crunch when lockdowns in Malaysia, India and the Philippines affected offshore service centres, Singtel said.

The company also reiterated its stance on financial prudence at the AGM, citing both Covid-19-related uncertainties, as well as the need to invest in 5G wireless technology, which it billed "a multi-year investment programme for long-term growth".

Singtel recently clinched a licence to build and run a nationwide 5G network in Singapore, with the rollout expected to begin from 2021.

While the telco does not expect 5G to be a key driver of returns in the near term, it still anticipates new revenue opportunities in the longer run, from consumer applications such as cloud gaming, and enterprise applications such as edge computing.

"We expect that the industry will see more rational pricing decisions to enable acceptable returns and continued network investments," it said of the Singapore market.

Separately, key Singtel associate Bharti Airtel posted a loss of 151.9 billion rupees (S$2.79 billion) for the three months to June 30, on the back of exceptional items such as adjusted tax charges and provisions for network-related fees owed to the Indian government.

In all, India-based Airtel clocked 155 billion rupees in exceptional charges for the quarter, after taxes and minority interests, with Singtel's equity share of this coming to S$911 million.

Singtel will disclose its share of its regional associates' results - including Airtel's - in August 2020, the group added in another bourse update on Wednesday.