Singapore Telecommunications (Singtel) issued a positive annual earnings outlook and posted a nearly threefold increase in third-quarter earnings on Wednesday, driven by an exceptional gain, propelling its shares to near six-year highs.
Shares in Singtel climbed 1.2% to S$3.4 and were on track for their strongest trading session since January 31, provided the gains hold. The stock was nearing its S$3.475 high from July 2019.
The firm's net profit rose 183.4% to S$1.3 billion ($968.85 million) for the three-month period ended December 31, from S$465 million last year.
Singtel recorded a net exceptional gain of S$639 million from disposal of partial stakes in Thailand associate Intouch and Indara, formerly known as Australia Tower Network, coupled with its share of an exceptional gain from its stake in India's Bharti Airtel.
Singtel had reported a net exceptional loss of S$94 million a year earlier.
Airtel's gain primarily consisted of a fair value gain from the consolidation of Indus Towers, a reversal of a doubtful debt provision by Indus Towers, and foreign exchange gains from the appreciation of the Nigerian naira and Tanzanian shilling.
Singtel now anticipates its earnings before interest and taxes - excluding contributions from its associates - to rise at a robust pace, with a projected increase in the high teens to low twenties percentage range for the 2025 financial year.
This marks an optimistic shift from the earlier projection of growth in a more modest low-double digits.
The telecommunications giant said it expects to pay a total ordinary dividend of around 16.5 Singapore cents apiece for the financial year, higher than the 15 Singapore cents paid a year ago.
Citi analysts expect markets to react positively to the company's profit performance and have raised their price target on the stock.
"We keep Singtel at 'buy' with 5% FY25 yield poised for further expansion and with potential for additional capital management exercises in place. This is further complemented by sustained double digit net profit after tax growth outlook," Citi said. - Reuters
