Nov 10 (Reuters) – Singapore Telecommunications (SingTel) (STEL.SI) said on Thursday the company may face the brunt of new macroeconomic challenges that are expected to persist in fiscal 2023 despite a 23% jump at its prime – half of the net profit.
Given the challenges of high inflation and rising interest rates, the company stressed that it was “well positioned” to weather headwinds due to a stable financial situation and a cash generation.
SingTel, which is going through a strategic reset, said net profit for the six months ended Sept. 30 was S$1.17 billion, down from S$954 million a year earlier.
The company’s performance was boosted by a strong turnaround in part-owned Bharti Airtel (BRTI.NS) and an exceptional gain of S$1.01 billion ($720.25 million) from the partial divestment of its stake in Airtel.
Optus, the Australian unit of SingTel, reported a massive data breach where up to 10 million customer data was compromised.
SingTel said a provision of A$140 million ($89.99 million) has been made and recorded for Optus as an exceptional expense for an external independent review, third party credit monitoring services and the replacement of identification documents if necessary.
Commenting on Optus and its operations, General Manager Yuen Kuan Moon said, “Although the cyberattack unfortunately interrupted Optus’ momentum at the end of the first half, we expect Optus to come back stronger.”
SingTel, which said its net debt was down nearly a third from a year earlier, declared an interim dividend of 4.6 Singapore cents per share coupled with a special dividend of 5.0 cents of Singapore per share.
Due to a weaker Australian dollar and weaker consumer sentiment, Singtel took on a non-cash impairment charge of S$1 billion on Optus goodwill. However, he ensured that the impairment does not affect the company’s cash flow or performance.
($1 = 1.5557 Australian dollars)
($1 = 1.4023 Singapore dollars)
Reporting by Roushni Nair in Bangalore; Editing by Krishna Chandra Eluri and Sherry Jacob-Phillips
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