SingTel – GS

1Q11 Result Preview

Result Date:

Thursday, 12 August 2010, approximately 9:30am (AEST).

GS&PA Estimates:

N/a.

Trading Comment:

SingTel’s key Associates will have reported their June quarter results by the time SingTel reports its 1Q11. Thus, the focus will be on the performance of SingTel’s Singapore and Australian businesses.

Look Out For:

Singapore: At the FY10 result, SingTel gave subdued guidance for Singapore, with FY11 revenues expected to grow mid-single-digit and EBITDA expected to decline low-to-mid-single-digit. This is despite robust economic conditions (1Q10 GDP +25.1%, 4Q09 +11.0%, 3Q09 -4.6%, 2Q09 -12.4%, 1Q09 -15.5%). We expect to see: (1) robust WBB growth offset by slower mobile net adds; (2) a continued slowdown in fixed line; and (3) rising costs for SingTel’s new initiatives (e.g. mio TV). We may also get clarity on how SingTel expects its financials to look (margins, capex, etc.) in an NBN world.

Australia: At the FY10 result, SingTel guided to mid-single-digit growth in sales and EBITDA in FY11. We expect to see broadly similar sales trends to previous results in 1Q11 – Mobile strong, Business and Wholesale flattish, Consumer and SME down. Our focus will be Optus Mobile (c. 70% of Optus EBITDA), specifically: (1) whether Optus Mobile has maintained its double-digit revenue growth momentum; (2) whether Telstra’s renewed vigour has had an impact on net adds; and (3) whether Optus Mobile has managed to drive earnings growth and margins.

Associates: Following a robust recovery in FY10 (associates contribution +19.2% in FY10 cf. FY09 -21.6%) we expect growth in SingTel’s Associates earnings to slow in FY11. To date, both Telkomsel (NPAT -14.5%) and Globe (NPAT -27.5%) have reported weaker June quarter results. We also expect Bharti’s profit results (reports 11 Aug) to remain challenged given: (1) the impact of the price war; and (2) costs associated with the Zain acquisition.

Weakness in the underlying results is likely to be offset to some extent by the stronger Indonesian Rupiah.

SingTel – GS

1Q11 Result Preview

Result Date:

Thursday, 12 August 2010, approximately 9:30am (AEST).

GS&PA Estimates:

N/a.

Trading Comment:

SingTel’s key Associates will have reported their June quarter results by the time SingTel reports its 1Q11. Thus, the focus will be on the performance of SingTel’s Singapore and Australian businesses.

Look Out For:

Singapore: At the FY10 result, SingTel gave subdued guidance for Singapore, with FY11 revenues expected to grow mid-single-digit and EBITDA expected to decline low-to-mid-single-digit. This is despite robust economic conditions (1Q10 GDP +25.1%, 4Q09 +11.0%, 3Q09 -4.6%, 2Q09 -12.4%, 1Q09 -15.5%). We expect to see: (1) robust WBB growth offset by slower mobile net adds; (2) a continued slowdown in fixed line; and (3) rising costs for SingTel’s new initiatives (e.g. mio TV). We may also get clarity on how SingTel expects its financials to look (margins, capex, etc.) in an NBN world.

Australia: At the FY10 result, SingTel guided to mid-single-digit growth in sales and EBITDA in FY11. We expect to see broadly similar sales trends to previous results in 1Q11 – Mobile strong, Business and Wholesale flattish, Consumer and SME down. Our focus will be Optus Mobile (c. 70% of Optus EBITDA), specifically: (1) whether Optus Mobile has maintained its double-digit revenue growth momentum; (2) whether Telstra’s renewed vigour has had an impact on net adds; and (3) whether Optus Mobile has managed to drive earnings growth and margins.

Associates: Following a robust recovery in FY10 (associates contribution +19.2% in FY10 cf. FY09 -21.6%) we expect growth in SingTel’s Associates earnings to slow in FY11. To date, both Telkomsel (NPAT -14.5%) and Globe (NPAT -27.5%) have reported weaker June quarter results. We also expect Bharti’s profit results (reports 11 Aug) to remain challenged given: (1) the impact of the price war; and (2) costs associated with the Zain acquisition.

Weakness in the underlying results is likely to be offset to some extent by the stronger Indonesian Rupiah.

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