SingTel posted FY14 revenue of S$16848.1m, down 7.3%, but was just 0.8% above our forecast, while reported net profit edged up 4.1% to S$3652.0m, and was just 0.5% shy of our estimate; excluding exceptionals, core net profit came in around S$3611m, almost unchanged from FY13. SingTel declared a final dividend of S$0.10/share, bringing its total payout to S$0.168, or a payout ratio of 74% of underlying profit.

For FY15, SingTel expects its core business revenue to remain stable while EBITDA to grow by low single-digit level. It expects to spend S$2.3b as capex, with S$900m for Singapore and the rest for Australia. As SingTel also expects free cashflow to remain stable, it has kept its dividend payout at 60-75% of underlying net profit. Pending the analyst briefing later, we maintain our BUY rating but place our S$3.74 fair value under review.

Source: OCBC Research - 15 May 2014