Singtel Q1FY20 Results Dragged Down By Airtel

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Currently, Singtel makes up 9% of my wife’s stock portfolio. On 8th August 2019, Singtel has released their 1QFY20 financial results. Singtel has posted a net profit of S$541 million that was down a whopping 35%. This was due to Airtel’s losses. There was no surprises that an associate losses can have a lot of impact on Singtel as 48% of Singtel’s net profit comes from its Regional Associates which consists of Airtel, AIS, Telkomsel and Globe.

If we put the negative news about Airtel aside, below are the positives from the rest of the associates:

  • Telkomsel in Indonesia posted an 18% increase in earnings on robust growth in data and digital services.
  • In the Philippines, Globe saw strong data revenue growth from its mobile and broadband businesses.

Here are the financial highlights for Singtel’s Quarter Ended 30 June 2019.

Debt

In the quarter, Singtel paid S$735 million for subscription to Airtel’s rights issue based on its rights entitlement for its direct stake of 15%. On top of this, Singtel has invested on upgrading its network and spectrum (5G). Overall, net debt increased by S$1.97 billion from a quarter ago to S$11.85 billion. With higher net debt, net debt gearing ratio increased to 28.4%.

Free Cash Flow

Free cash flow for the quarter was S$1.22 billion, down 17% due to lower associates’ dividends and higher capital expenditure.

Dividend Yield

Based on the current closing share price of S$3.26 and historical dividend payout of 17.5 cents, the current dividend yield is 5.37%. The current yield is attractive but take note of the outlook below. My personal opinion is that growth has slowed down and outlook does not seem rosy. The main concern here is still about Airtel and what is Singtel going to do about it.

Can Singtel continue to sustain its dividends?

Outlook

Here is a summary of the outlook for Singtel as indicated in its management report.

  • Excluding acquisitions, consolidated revenue for the Group to grow by mid single digit and consolidated EBITDA to grow by high single digit.
  • Capital expenditure is expected to approximate S$2.2 billion, comprising A$1.4 billion for Optus and S$0.8 billion for the rest of the Group.
  • Group free cash flow (excluding spectrum payments and dividends from associates) to be around S$2.4 billion.
  • Dividends from the regional associates are expected to be around S$1.2 billion, reflecting Telkomsel’s lower earnings for its financial year ended 31 December 2018.
  • Revenue from ICT services to grow by low single digit.
  • Cyber security revenue to increase by low teens.
  • Amobee’s operating revenue (including intragroup revenue) to grow by high single digit and its EBITDA to improve.

Three Common Workplace Problems

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I was promoted to a manager in the year 2017. Time flies and it has been 2 years that I have been in the role of being a manager. In simple terms, a manager is suppose to manage people. Recently, I came across a book that highlights the common workplace problems that burden managers. It hit the nail right on the spot and this is the problem I faced currently at my workplace without myself realising it!

Here are the 3 major problems that I currently faced at my workplace:

1. Staff Being Overdependence

Being competent at work, I always step in to help my staff that reports to me whenever they faced some problems with the project they are handling. This has created an overdependence on me to always come in to solve their problems and in some cases, do the work for them. As time goes by, my staff have the impression that I am responsible for their work.

2. Myself Overwhelmed by Work

As I took on more projects, I was overwhelmed by the piles of work. I have two staff reporting to me. Sometimes when I ask them at the end of the day what they have accomplished, they told me they have not completed anything. That was when I realise that they are uploading their work which they are responsible for to me.

3. My Staff Became Disconnected

Since I always came in to solve my staff’s problems, they became unconfident of themselves and their abilities. They also avoid challenging tasks and projects as they knew I will take up those difficult tasks when they kept quiet.

Conclusion

I was glad I realise the above early. I have previously attending a one day course about Coaching and this is where I could apply the knowledge I have learnt. Instead of doing the work for them, I will now ask them “What is stopping you from fixing the problem?” and “How much time do you need to do your research to solve the current problem?”.

I have been practising the above for a month and it works! I can now focus on the things that managers should do instead of doing the actual work for my staff. I hope their abilities and skillset will grow over time since they now have more hands on experience.

What kind of challenges do you face at work and how do you solve them?

Maybank Singapore National Day Time Deposit Promotion

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If the OCBC Bank Singapore National Day Savings Promotion didn’t attract you, you may be interested in the above Singapore Dollar Time Deposit promotion from Maybank. You can choose between a 9 months or 12 months tenure period whereby the interest rate per annum is 2.10% p.a. and 2.22% p.a. respectively. This promotion is the best one I have found so far in terms of the interest rate it offers.

Here is the catch for the time deposit offered by Maybank:

  • You need to have a Maybank Current or Savings account.
  • For every S$1,000 deposited into Maybank Current or Savings accounts (minimum S$2,000), you can deposit S$10,000 into Maybank Singapore Dollar Time Deposit accounts (minimum S$20,000). This means you need at least S$22,000 (S$2,000 into Current or Savings account and S$20,000 into the time deposit account).
  • Choose between 9 months or 12 months period to enjoy 2.10% p.a. or 2.22% p.a. respectively.
  • Must be fresh funds.

For fresh funds of S$20,000 at 2.20% p.a. for 12 months, the interest you earn is S$440.

For fresh funds of S$20,000 at 2.10% p.a. for 9 months, the interest you earn is S$314.18.