Singtel's net profit fell 42% in the first half of FY2025 without the one-off gain of S$1.2 billion from the merger of Telkomsel and IndiHome last year.
Singtel reported a six-month net profit of SG$1.23 billion ($919.6 million) for the period ended September 30, down 42% from S$2.14 billion ($1.8 billion) in the same period last year.
In a stock exchange filing on Wednesday, the Singapore-based operator attributed the lower figure to the absence of the SG$1.2 billion ($897.1 million) one-off gain recorded last year from the merger of its Indonesian associate Telkomsel with IndiHome, the country's largest fixed broadband provider.
Singtel said its underlying net profit rose 6% to SG$1.19 billion ($889.7 million), mainly due to better mobile performance and disciplined cost management at its Australian subsidiary Optus, and continued margin improvements and solid bookings at its technology services arm NCS.
"Our half-year results show continued growth in our underlying earnings, indicating a solid start to our Singtel28 plan to lift business performance. Optus and NCS drove the positive momentum, underscoring our focus on execution and operating rigour," said Yuen Kuan Moon, group CEO at Singtel, in a statement.
"The progress we have made in our core businesses, growth engines and active capital management has been reflected in the steady increases in our dividend payouts since our strategic reset in 2021. The changes have been well-received by the investment community," he added.
According to Singtel, the company's operating revenue for the first half of FY2025 remains "stable" at S$6.99 billion ($5.23 billion) following the sale of its cybersecurity unit Trustwave.
Its earnings before interest and taxes (EBIT) were SG$738 million ($551.7 million) in the six months to September 30, with its subsidiaries leading the way. Optus recorded a 58% growth in EBIT, while NCS's jumped 40% in the first half of the year.
Revising its previous guidance issued in May 2024, Singtel said it expects its EBIT to grow at a low double-digit rate for the fiscal year ending March 31, 2025. Previously, the growth rate was expected to be in the high single-digit to low double-digit range.
Driving the growth of AI and data centers in Southeast Asia
Yuen outlined the Singtel Group's priorities for the remaining half of the fiscal year, with a focus on enterprise growth in Singapore and Australia, greater mobile momentum in Australia and a leaner overall cost structure.
He also reiterated the Group's commitment to developing new technologies, such as network slicing, and new revenue streams in AI and data centers.
''Both NCS and Nxera [Singtel's data center brand] have a critical role to play in advancing AI adoption in the region and are continuing to invest in AI infrastructure and capabilities to better serve enterprise and governments. Nxera is developing next-generation AI-ready data centers in Singapore, Indonesia, Thailand and Malaysia and aims to expand into new markets," said Yuen.
"We will continue scaling NCS and building out Nxera's data centers, which will commence operations from mid-2025 to meet increasing demand. We will also keep supporting our regional associates to capture growth opportunities in the areas of enterprise and fixed broadband," he added.
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