Image Source : The Straits Times
Singapore Telecommunications (SingTel) has unveiled a US$1.6 billion share buyback plan alongside an expanded asset monetisation target, reinforcing its commitment to capital efficiency and shareholder value. The announcement has sparked investor optimism, driving SingTel’s stock to its highest level in nearly nine years.
Key Developments in SingTel’s Strategy
- Share Buyback Initiative: SingTel plans to repurchase S$2 billion (US$1.55 billion) worth of shares over the next three years, reflecting confidence in its financial position.
- Asset Monetisation Expansion: The company has raised its medium-term asset recycling target to S$9 billion, up from S$6 billion set last year, following the recent sale of a 1.2% stake in Bharti Airtel for S$2 billion.
- Market Reaction: SingTel shares surged by 3.6% on Thursday, reaching S$3.99, their highest level since October 2016.
Financial Performance and Growth Outlook
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Profit Surge: Net profit for the year ended March 31 soared five-fold to S$4.02 billion, driven by one-off divestment gains and the absence of last year’s impairment charge related to Optus Enterprise’s fixed network assets.
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Divestment Strategy: The partial sale of SingTel’s Comcentre headquarters contributed significantly to its S$1.5 billion exceptional gain for the year.
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Future Projections: SingTel expects high-single-digit growth in earnings before interest and taxes (EBIT) for fiscal 2026, following a 20% EBIT jump this year.
Market Implications and Strategic Positioning
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Strengthened Financial Flexibility: The buyback program and asset monetisation efforts are expected to enhance SingTel’s financial stability and shareholder returns.
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Industry Trends: Telecom companies worldwide are leveraging asset recycling to unlock capital from non-core assets while maintaining operational capabilities.
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Dividend Declaration: SingTel has announced a final dividend of 10 Singapore cents per share, up from 9.8 cents last year, further reinforcing its commitment to shareholder value.
Future Outlook
SingTel’s latest financial moves signal a proactive approach to capital management and market positioning. With a strong balance sheet and strategic asset monetisation, the company is well-positioned to navigate industry challenges while delivering sustained growth.
Source: Reuters, The Star, MarketScreener.
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