Welcome to our weekly segment where we feature interesting snippets from corporate earnings and/or announcements.
Singtel (SGX: Z74)
Singtel released its fiscal 2022 third quarter (3Q2022) business update for the period ended 31 December 2021.
It was a mixed set of results amid difficult conditions for the telco.
For the first nine months of FY2022 (9M2022), operating revenue dipped by 2.6% year on year to S$11.6 billion.
Operating profit fell by 5.1% year on year to S$886 million, but underlying operating profit, which excludes one-off impacts, rose by 49.5% year on year to S$823 million.
Underlying net profit, which includes contributions by associates, rose 12.3% year on year to S$1.46 billion.
Both Singapore and Australian consumer divisions saw single-digit year on year declines in operating revenue for 9M2022 but this was offset by revenue rises for Singtel’s corporate business divisions NCS and Amobee.
For Singapore, total mobile customers and average revenue per user remained stable year on year, while data usage continued its upward trend, rising by 35.6% year on year to eight GB per month.
Singtel’s Pay TV revenue declined by 2% year on year to S$151 million while the number of residential customers dipped by 3.5% year on year, a trend also witnessed at competitor StarHub Limited’s (SGX: CC3) latest fiscal 2021 earnings.
The telco saw a strong take-up for its 5G service, garnering more than 300,000 customers in Singapore.
The group also partnered with Microsoft (NASDAQ: MSFT) to launch Asia’s first public multi-access edge computing platform.
Meanwhile, Singtel also collaborated with Alphabet’s (NASDAQ: GOOGL) Google to grow India’s digital ecosystem and has invested in Bank Fama in Indonesia to pursue digital banking opportunities.
CEO Yuen Kuan Moon has reiterated Singtel’s commitment to recycling capital to unlock value from its existing assets. This will allow the group to deploy the cash into growth drivers and deliver a sustainable dividend to investors.
Genting Singapore (SGX: G13)
Genting Singapore, which owns and operates Resorts World Sentosa (RWS), one of two integrated resorts (IR) here, reported its FY2021 earnings this week.
Revenue was flat at S$1.07 billion for FY2021 but net profit more than doubled year on year from S$69.2 million to S$183.3 million.
However, if we look at the results for the second half of 2021 (2H2021), Genting Singapore reported a 17% year on year fall in revenue and a sharp 49% year on year decline in net profit.
The reason for the weak performance was due to a decrease in visitorship resulting from a rash of COVID-19 community cases amid the rise of the Omicron variant.
Despite the softer 2H2021 results, the group declared a final dividend of S$0.01 per share, unchanged from the previous year.
The IR operator is slated to begin its S$4.5 billion mega expansion of RWS by the second quarter of this year and will start with an initial S$400 million investment.
The first phase of the development involves the expansion of Universal Studios Singapore and the SEA Aquarium, which will be rebranded as the Singapore Oceanarium. These are expected to be completed by end-2024.
At the same time, RWS will also refurbish three hotels — the Hard Rock Hotel Singapore, Hotel Michael, and Festive Hotel, in phases through 2023.
Genting Singapore also announced that it had acquired leasehold land for the expansion of its IR, amounting to S$942 million.
Lendlease Global Commercial REIT (SGX: JYEU)
Lendlease Global Commercial REIT, or LREIT, has announced its intention to acquire the remaining interest in Jem, a suburban mall in Singapore, at an agreed property value of S$2.08 billion.
This acquisition will more than double the REIT’s deposited property value from S$1.7 billion to S$3.6 billion.
With this purchase, LREIT will own a total of three assets, including 313 Somerset in Singapore and Sky Complex in Milan, Italy.
Jem enjoys 100% committed occupancy and has a weighted average lease expiry (WALE) by gross rental income of 5.9 years.
This transaction is projected to increase LREIT’s fiscal 2022 first half (1H2022) distribution per unit (DPU) by 10.5% to S$0.0249.
The REIT’s portfolio metrics will also improve, with portfolio WALE rising from 8.4 years to 8.9 years and the suburban retail component rising to nearly half of the portfolio’s valuation from just 16.3% previously.
The manager will propose an equity fundraising exercise to partially fund this acquisition that may involve a private placement of new units in LREIT to institutional investors.
It also has the option to announce a non-renounceable preferential offer of units to existing unitholders.
The remaining consideration will be satisfied by a mix of debt financing and the issuance of promissory notes and/or perpetual securities.
LREIT’s gearing is expected to rise from the current 33.5% to 40.7% after the completion of the acquisition.
This is your chance to tap into David Kuo’s decades-long experience in one sitting! We have released a Special Free Report that outlines his strategies for 2022 and beyond. If you’re looking into dividend stocks next year, then this FREE report will be invaluable to your success. Click here to download now.
Disclaimer: Royston Yang owns shares of Alphabet.
