Singtel reported its 1QFY17 results this morning, with saw revenue fall 7% YoY to S$3908m, impacted by the decline in mobile termination rates in Australia, 3% depreciation of the AUD, higher mobile service credits from device repayment plans, and lower equipment sales. However, EBITDA was stable at S$1236m (- 0.4%), as the decline in mobile service revenue was mitigated by lower traffic expenses in Australia.

Reported NPAT was flat at S$944m; while core NPAT was up 7% at S$954m, meeting 26% of our full-year forecast; although revenue only met 23%, we judge the results to be broadly in line.

Going forward, Singtel has affirmed its previous guidance for FY17 i.e. it expects consolidated revenue and EBITDA for the group to both grow by low single digit; capex to remain at S$2.4b on cash basis; group free cashflow to be ~S$1.5b; ordinary dividend from associates to be ~S$1.2b.

We will have more after the analyst briefing later. For now, we maintain our HOLD rating but place our S$4.29 FV under review.  

Source: OCBC Research - 11 Aug 2016