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We expect consolidated revenue to decline by 1.6% YoY, on currency headwind and adoption of IFRS 15. We forecast consolidated EBITDA to decline by 5.3% YoY due to the expected halt in NBN payments and depreciation of AUD vs SGD (3.4%). We expect underlying net profit to decline more sharply by 15.2% YoY due to decline in associates' contribution (24.5% YoY).
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We expect Singapore mobile service revenue to witness a sharp decline (27.1% YoY) in 1Q FY19, impacted by the adoption of IFRS 15 while fixed line revenue should remain flat. We estimate EBITDA to decline by c.2% YoY on margin pressure in the fixed line segment.
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We forecast its Australia business service revenue to grow 1.7% YoY, driven by mobile business. However, we expect EBITDA to decline by 4.4% YoY, due to the expected halt in NBN payments. Adjusted for the same, we expect EBITDA to remain largely flat.
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We incorporate updated forecasts and valuations for Bharti Airtel and Telkomsel in our SingTel model.
As a result, we lower our FY18-20 estimates by 4-8% and our SOTP-based target price by ~1% to S$4.25 (from S$4.30).
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