SingTel – OCBC
STABLE 3QFY13 RESULTS
- 9MFY13 results in line
- No change to guidance
- Higher S$3.68 FV
Stable 3QFY13 results
SingTel saw its 3QFY13 group revenue dipping 4.8% YoY to S$4597m, and while EBITDA rose 0.5% to S$1262m, net profit fell 8.3% to S$827m (mainly due to exceptional loss of S$67m). However, excluding exceptional items, underlying net profit was down 2.3% at S$874m. 9MFY13 revenue fell 2.4% to S$13702m, meeting 73% of our FY13 forecast, while net profit slipped 2.2% to S$2640m; core earnings was down 1.6% at S$2610m, or 69% of full-year estimate.
FY13 guidance unchanged
Going forward, SingTel has kept its previously revised guidance unchanged for FY13 i.e. consolidated revenue to see single-digit decline, although EBITDA will remain stable. Free cashflow (FCF) is expected to remain around S$2.6b (its 9MFY13 FCF hit S$2.49b); capex for Singapore still around S$950m and Australia about A$1.1b (excluding spectrum payments). SingTel adds that consolidated revenue and EBITDA would be impacted by material exchange rate movements in A$ and regional currencies.
Myanmar is a potential market
While SingTel will continue to focus on its transformation plan to grow in the new digital era, it can also grow its regional business. We understand that the telco is understandably keen on getting into a new and untapped market in Myanmar. However, management notes that it is still early days as the government there has just called for an expression of interest. It adds that many global telco players are also keen on securing one of the two licenses potentially on offer.
Maintain BUY with new S$3.68 FV
As results were in line with our expectations, we opt to leave our forecasts unchanged for now. However, in line of the recent recovery in the price of its listed associates, our SOTP-based fair value improves from S$3.53 to S$3.68. We also maintain our BUY rating on the stock.