In a Thursday report, analyst Luis Hilado says Singtel has the most defensive business structure among the local telcos due to this and due to its exposure to leading regional associates.
Meantime, the majority of $2.3 billion proceeds from the Netlink Trust IPO is reserved for spectrum payments and growth investments in the digital space.
The scaling up process both organically and inorganically for Amobee has led to it becoming EBITDA positive this FY.
“Singtel is likely to adopt the same model for the rest of Digital Life and the enterprise cybersecurity division.” says Hilado, “We have not factored in acquisitions in our current forecasts.”
Singtel’s 2Q consolidated revenues at $4.37 billion were in line with Maybank’s and FactSet’s consensus estimates at 47% and 49% of the full year.
Operational EBITDA at $1.29 billion was in line with estimates with opex generally trtacking revenue growth and hence EBITDA margins were generally stable. Pre-tax associate income at $659 million was weak due to Bharti and Globe with the former due to continued intense competition while the latter from higher depreciation charges.
A 22% q-o-q and 10% y-o-y decline in taxes salvaged the situation and hence core profit at $929 million was 51% of Maybank and 46% of consensus.
“Our sum-of-parts based target price is raised by 1.3% to $3.87,” adds Hilado.
Shares in Singtel are down 2 cents at $3.76 or nearly 17 times FY18 earnings.
