Hi, Arthur. Thank you for taking the time to sit down with us and talk about Singtel's first half results announced on 13th November.
Hi, Victoria. Always happy to have a chat with you. It's been a while. Nice to see you.
Yeah, it's been a while.
Yeah.
Can you start off by giving us an overview of the results?
I think we had a very decent first half results. Our underlying net profit, from which our dividend is based, grew 6% year-on-year. That is despite all the currency headwinds that we are seeing. On a constant currency basis, it actually went up 9% year-on-year. A very respectable set of results. What is worth calling out is also the fantastic performance of some of our OpCos, particularly Optus and NCS. Optus, as you know, our Australian business, has performed 58% increase in the EBIT year-on-year. NCS has shown a 40% increase in EBIT. A huge shout-out to these two OpCos. I think it's really executing to the plan. Optus, they really turn around the enterprise business very strongly. There are a lot of new wins, new accounts, and they turn that around very nicely.
If you look at our associates as well, our regional associates, I think we've seen actually big improvements in many of the markets. Maybe the one to call out is perhaps Indonesia, Telkomsel, where we saw some weakness, and it's really driven by the market competition that we're seeing in Indonesia. The team, I have every confidence that the team will execute well, and we look forward to improving results over the next few quarters.
It's been half a year since your Singtel28 growth plan was announced.
I know. Time flies.
Yeah.
Yes.
Can you share more about how it's been progressing so far?
It's been progressing very well. I think we're very encouraged. I personally am very happy when we announced ST28. It was very well-received by the markets. Personally, I was also very happy because many of my Singtel colleagues actually came to me, came to my boss, Moon, and my colleagues and said that it was very good that we announced ST28. I think the overall reception was very positive. I think what is important is we continue ST28, right? As you know, ST28 is really focusing on lifting operating performance as well as active capital management. It's a two-pronged strategy. If you look in the area of our operating performance, I would say our businesses have done and delivered to plan. I talked a lot about Optus earlier. There's big improvements in the enterprise business. There's a real focus on costs and optimizing it to improve margins.
The mobile business also has done well with improvements in the postpaid business as well. If you look at NCS, for example, it is also really focusing on margins and improving those margins for their projects. In Singtel, for example, in Singtel Singapore, it's really leveraging on new revenue streams, like leveraging on our 5G capabilities. We have network slicing, we have API connectivity. We even won a very big enterprise contract with Nestlé, which is well-known to everybody. It's not just a Singapore contract, it's actually a global contract. Really, I think I must give credit to the teams for really executing very well and lifting operating performance.
Our associates also have done very well. On the capital management side, I think we continue to actively manage the capital proactively for our shareholders. A big call-out is really our Thai business, AIS and Intouch. We announced the amalgamation between Intouch and Gulf Energy, this was very well received by the market. In fact, the value of our stakes in both Thai companies, Intouch and AIS, actually combined went up by almost SGD 2.5 billion. Very encouraging and I would say so far so good. ST28 started off well.
Ordinary dividends have increased 35%. Is there more room for dividends to increase further going down the line?
We have been quite consistent and said that we look to grow dividends on a sustainable basis. If our business improves, dividends will improve. It's really part of our dividend policy, 70%-90% of underlying profits, plus a value realization dividend of SGD 0.03-SGD 0.06. We announced an interim dividend of SGD 0.07. Now if you recall, a few months ago when we announced the FY 2024 dividend, we announced a total of SGD 0.15, of which we took SGD 0.019 and kept it to be paid out in December. This SGD 0.019 plus the SGD 0.07 that we just announced on the interim is a total of SGD 0.089 that we're going to pay out on the 9th of December just in time for Christmas.
That's great for the family.
Yes. That's really a big Christmas present to our shareholders, and I hope you all take the money and reinvest into Singtel, but keep some to buy presents for your loved ones. Yeah.
Could you share more about the areas you'll be focused on for the second half of the year?
You know, Victoria, it's no special magic bullet. It's just hard work, consistent laser focus on the execution of ST28. All our businesses need to fire up and continue to fire up. We need to manage our capital effectively. There are a few projects that are brewing in the second half, and I'm pretty excited because I hope to be able to execute on a few of them and be able to recycle capital and bring back capital, and then we can pay a very decent dividend, a full- year dividend to our shareholders.
It looks like the Singtel 28 Strategy is taking shape very nicely. Thank you, Arthur.
I think fingers crossed, right? It's a great team effort, I really thank you to all the shareholders for your support. We continue to want to do better for all of you, it's really nice to see you, Victoria. Look forward to our next session. Thank you.
Look forward to it, too. Thank you.
Thank you.