Singtel reported 4QFY15 revenue of S$4338.9m, +5.1% YoY, while reported net profit climbed 4.5% to S$938.8m; underlying net profit was up 3.3% at S$950.0m. For the full-year, revenue rose 2.2% to S$17,223m, or about 2.5% above our forecast, while reported net profit gained 3.5% to S$3,782m; underlying earnings was up 4.7% at S$3,779m, or about 1.3% above our estimate.

Singtel has declared a final dividend of 10.7 S cents, bringing the full-year payout to 17.5 S cents, versus a total of 16.8 S cents in FY14; this represents a payout ratio of 74% of underlying net profit. Going forward, Singtel expects consolidated revenue to grow by midsingle digit level and EBITDA to grow at low single digit level.

Specifically, Singapore mobile revenue should rise by mid-single digit level; Australia mobile revenue by low single digit; Group ICT revenue to increase by mid-single digit. It also expects Amobee to turn in around S$350-400m of revenue; but Group Digital Life will still incur a negative EBITDA of S$150-180m.

Singtel expects to spend around S$2.3b on cash capex and generate around S$1.5b of free cashflow. We will have more after the analyst briefing. For now, we maintain our HOLD rating but will be revising our S$4.31 fair value to reflect the latest guidance and value of its associates.

Source: OCBC Research - 14 May 2015