Welcome to this week’s edition of top stock market highlights.
Singtel (SGX: Z74)
Singtel announced its latest financial results for the first half of fiscal 2025 (1H FY2025) ending 30 September 2024.
The telco saw a slight 0.5% year-on-year dip in operating revenue to S$7 billion.
Operating profit rose 7.4% year on year to S$1.9 billion as expenses declined by 3.7% year on year.
Excluding associates’ contributions, operating profit would have climbed by 27.3% year on year to S$738 million.
Net profit plunged by 42.4% year on year to S$1.2 billion.
There was an exceptional S$1.2 billion of gains in the previous period from the issuance of shares by Telkomsel, an associate of Singtel.
Singtel, however, saw free cash flow for 1H FY2025 turn negative at S$62.4 million versus a positive free cash flow of S$1 billion in the prior year.
The blue-chip group declared a higher core dividend of S$0.056 compared to S$0.052 in 1H FY2024.
As icing on the cake, the telco also declared a value realisation dividend of S$0.014, bringing the total interim dividend for 1H FY2025 to S$0.07, up 35% year on year.
In terms of divisions, Optus delivered a strong performance with operating profit jumping 58% year on year to A$223 million.
Singtel Singapore saw a stable revenue and operating performance for 1H FY2025.
Its NCS division did well, with revenue inching up 3% year on year to S$1.4 billion and operating profit surging by 40% year on year to S$130 million.
Singtel plans to advance its ST28 strategy to drive operating profit improvement.
It is looking at enterprise growth in both Singapore and Australia and will focus on scaling its growth engines.
The telco will also work on leaner cost structures and focus on active capital management.
Sea Limited (NYSE: SE)
Sea Limited also released its latest earnings, but it was for the third quarter of 2024 (3Q 2024).
The technology company saw another strong performance for the quarter as revenue grew by 30% year on year to US$4.3 billion.
Although the digital entertainment division experienced a near-16% year-on-year fall in revenue to US$497.8 million, Sea’s e-commerce division (led by Shopee) saw a sharp 41.2% year-on-year jump in revenue to US$3.4 billion.
Operating profit stood at US$202.4 million for the quarter, a sharp reversal from the prior year’s US$127.7 million operating loss.
Net profit came in at US$153.3 million.
Diving into each division, Shopee saw gross merchandise value (GMV) rise almost 25% year on year to US$25.1 billion.
Gross orders on the platform also rose 27.3% year on year to 2.8 billion.
Monthly active buyers also increased by 20% year on year for 3Q 2024.
The division is on track to deliver a 20% year-on-year growth in GMV.
Garena, Sea’s digital entertainment division, saw quarterly active users increase by 15.5% year on year to 628.5 million.
Importantly, quarterly paying users rose 23.9% year on year to 50.2 million, with the quarterly paying ratio coming in at 8%, up from 7.5% back in 3Q 2023.
The number of new users for Garena’s most popular game, Free Fire, was up 25% year on year.
With this positive momentum, Sea Limited now expects Garena’s 2024 bookings to grow by 30% year on year.
As for Digital Financial Services, the division saw its loan book surge by 70.4% year on year to US$4.6 billion.
The non-performing loans ratio declined from 1.4% a year ago to 1.2% in the current quarter.
CPF Investment Scheme
The CPF Investment Scheme (CPFIS) delivered healthy returns to investors.
For the one year ending 30 September 2024, CPFIS funds saw positive returns of 14.7%, an improvement from the prior year’s 9.69%.
These numbers were provided by the Investment Management Association of Singapore (IMAS) and Morningstar Inc (NASDAQ: MORN).
However, the overall performance for CPFIS-induced funds saw a negative 2.5% return in 3Q 2024.
Of note, the performance of unit trusts increased to 3.1% for the quarter while global equities posted a small increase of 0.6%.
Bonds also did well, posting gains of 3.55%, much higher than the 0.03% gain in 2Q 2024.
Over three years, all asset classes showed improved gains.
The best-performing was bonds, which posted a negative return of 2%, up from negative 6%.
Equities turned its losses into profits, posting returns of 1.23%.
Overall, Singapore saw its highest-ever net inflows of S$3.1 billion of authorised and recognised unit trusts registered for sale in 3Q 2024.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
