The Positives
+ Jump in dividends supported by FCF. The final dividend was 4.2 cents, up 68% YoY. Full-year dividend payout was 80%. It aligns with management guidance to distribute at least 80% of earnings or 5 cents, whichever is higher. The company mentioned it generated a free cash flow (FCF) of S$186mn, sufficient to cover the S$115mn in dividends. However, we believe lease payments of S$37mn should be deducted from FCF as it is operating in nature.
The Negative
– Slower services revenue. Service revenue declined 1.4% YoY in 4Q23 to S$527mn, the first decline in two years. Most segments were weak. Despite roaming revenue, mobile ARPU only rose 3% YoY to S$33. Entertainment revenue declined due to the absence of World Cup 4Q22. ARPU for broadband was flat YoY at S$34 as competition is accelerating ahead of the entry of Simba, the fourth mobile operator.
Paul has 20 years of experience as a fund manager and sell-side analyst. During his time as fund manager, he has managed multiple funds and mandates including capital guaranteed, dividend income, renewable energy, single country and regionally focused funds.
He graduated from Monash University and had completed both his Chartered Financial Analyst and Australian CPA programme.