Singtel Q1FY20 Results Dragged Down By Airtel

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.

Screening For Dividend Stocks In July 2019

How do you find stocks to buy on the stock market? One of the way is to use a stock screener. There are several websites that offer such a tool to screen for stocks using conditions that you can set such as dividend yield, P/E ratio, P/B ratio and Market Capitalization etc. Some website that offers such a tool are Singapore Exchange, FSMOne and StocksCafe.

For myself, I prefer to run my dividend stocks screening using StocksCafe as it allows me to save the conditions that I can pre-set. You can check out my review here on the StocksCafe Dividend Stocks Screener (Read more: Screening For Dividend Stocks Using Stocks Cafe Stock Screener).

Here are the results generated on 2nd July 2019 ordered from the highest current dividend yield to the lowest. Read More

Screening For Dividend Stocks In May 2019

I have recently added SPH Reit to my wife’s stock portfolio which has been on my watch list for quite some time. It is time to hunt for dividend yielding stocks to add to my watch list so that I can add them to either my or my wife’s stock portfolio when the opportunity arises.

One of the ways to hunt for dividend yielding stocks is to ran a stocks screener. I am currently using Stocks Cafe Stocks Screener as it allows me to save the conditions I have set to screen for dividend yielding stocks.

Here are the results ordered from the highest current dividend yield to the lowest.

Name Current Yield % P/E P/B Market Cap
Manulife Reit USD 8.736 15.7 1.047 1.1B
Haw Par 8.406 17.99 1.101 3.2B
Cromwell Reit EUR 8.367 10.36 0.956 1.1B
OUE Commercial Reit 6.891 10.02 0.701 1.4B
OUE Hospitality Trust 6.772 17.91 0.955 1.3B
Capita Retail China Trust 6.768 10.99 0.949 1.5B
Frasers Commercial Trust 6.531 9 0.938 1.3B
Far East Hospitality Trust 6.061 14.16 0.755 1.2B
Mapletree Industrial Trust 5.818 12.65 1.399 3.9B
CDL Hospitality Trust 5.752 17.58 1.05 1.9B
Oxley 5.688 5.82 0.937 1.3B
Ascendas-iTrust 5.682 6.56 1.471 1.3B
SingTel 5.521 16.68 1.785 51.6B
Suntec Reit 5.429 17.13 0.874 4.9B
DBS 5.409 12.34 1.472 70.6B
Hong Leong Finance 5.376 10.48 0.655 1.2B
SPH REIT 5.337 19.44 1.108 2.7B
Ascendas Reit 5.292 18.56 1.44 9.4B
Frasers Logistics and Industrial Trust AUD 5.116 12.58 1.327 2.5B
Mapletree NAC Trust 5.093 6.87 0.955 4.4B
Frasers Logistics and Industrial Trust 5.092 12.27 1.294 2.4B
SPH 5.081 14.97 1.151 4B
Frasers Centrepoint Trust 5.051 13.21 1.142 2.2B
Fortune Reit HKD 5.037 3.27 0.614 19.7B

Manulife Reit that appears in the top of the list looks interesting. Honestly, I have not done any research or read up on Manulife Reit yet but I do know a few financial bloggers holding the Reit. At 8.736% current dividend yield, this deem attractive to me but of course we all know that the higher the dividend yield, the higher the risk.

I do not know every stocks that appear in the above list but it serves as a good base to start researching deeper into them.

Please take note that the above is not a recommendation to buy or sell.

Happy hunting for dividend stocks!