Singtel Delivers Blockbuster Q1 2025 Earnings: Massive Exceptional Gains, Double-Digit Profit Growth, and Strategic Moves Set Stage for FY2026 Surge

Key Highlights from Singtel’s Q1 2025 Update

• Record net profit of S\$2.88 billion, up more than 317% year-on-year, driven by S\$2.20 billion in exceptional gains from strategic asset sales and mergers.
• Underlying net profit up 14% (or 17% in constant currency), fueled by robust performance from Optus, NCS, and higher profit contributions from regional associates Airtel and AIS.
• Stable operating revenue despite a 7% depreciation in AUD, with EBITDA and operational EBIT (OpCo EBIT) growing 1.3% and 9.6% respectively. In constant currency, these would have increased by 4.7% and 11%.
• Strong capital recycling and strategic focus: Partial divestment of Airtel stake and Intouch-Gulf Energy merger raise cash for future growth initiatives.
• Data centre business flagged as next growth engine, with new Nxera data centres set to open in Thailand and Singapore in FY2026.

Financial Performance in Detail

Singtel’s Q1 2025 marks a major inflection point, with the group reporting S\$2.88 billion in net profit, a staggering jump from S\$690 million a year ago. This was primarily due to S\$2.20 billion in exceptional gains—S\$1.47 billion from a partial disposal of its Airtel stake and S\$746 million from the Intouch-Gulf Energy merger.

Even after stripping out these one-off items, underlying net profit surged to S\$686 million, up 14% year-on-year (or 17% in constant currency). The performance was driven by:

• Optus (Australia): Delivered a 4.4% rise in operating revenue and 9.4% gain in EBITDA, thanks to higher mobile ARPU, customer base growth, and strong wholesale/enterprise sales. OpCo EBIT rocketed 36%.
• NCS (IT Services): Saw 3.7% revenue growth, 16% higher EBITDA, and 22% EBIT improvement, with strong government sector wins (S\$732 million in new bookings).
• Singtel Singapore: Revenue was flat, as gains in ICT and equipment offset declines in mobile (down 11% due to lower roaming/voice) and legacy services. EBIT rose 2.4% as depreciation fell.
• Digital InfraCo: Revenue dipped 1.8% due to softer satellite projects, but EBITDA rose 7.2% and EBIT jumped 29% thanks to cost controls, even as RE:AI expansion costs continued.

Regional Associates: Airtel and AIS Power Up, Telkomsel and Globe Weaken

• Airtel Group’s post-tax profit contribution more than doubled, with India operations buoyed by 4G/5G subscriber growth and higher ARPU. Airtel Africa also saw higher profits from strong revenue and cost efficiencies.
• AIS (Thailand) posted robust profit growth on higher ARPU and disciplined cost management.
• Telkomsel (Indonesia) saw profits fall due to macro headwinds and stiff data competition.
• Globe (Philippines) profits declined as revenue dropped amid weak consumer demand and higher depreciation/finance charges, despite cost controls.

Overall, regional associates’ post-tax contributions jumped 15% (or 29% if excluding Intouch, which was merged into Gulf and no longer equity-accounted).

Exceptional Gains and Capital Actions: What Shareholders Must Know

• Intouch-Gulf Energy Merger: Singtel’s 21.3% stake in Intouch merged into Gulf Development Public Company Limited, resulting in a S\$746 million gain. The new 7.7% Gulf stake is now classified as a fair value investment, with future returns recognized as investment income or fair value changes.
• Airtel Stake Sale: Singtel sold a 1.2% direct stake in Airtel for S\$1.93 billion, lowering its effective Airtel stake to 28.1%. This move generated S\$1.47 billion in gains and provides fresh capital for redeployment.
• In the prior period, gains were mainly from dilution of Airtel stake and Globe’s tower sales.

Legal and Regulatory Watch: Optus Faces Privacy Lawsuit in Australia

In a potentially price-sensitive development, the Office of the Australian Information Commissioner has filed a lawsuit against Optus, Singtel’s Australian arm, over the 2022 cyber attack that exposed customer data. While systems were not impacted and provisions have been made, the financial penalty (if any) is undetermined and could pose downside risk.

Outlook and Strategic Focus: Data Centers and Growth Momentum

Group CEO Yuen Kuan Moon highlighted ongoing business momentum and capital recycling as key to accelerating growth in the second year of the Singtel28 plan. The data centre business (Nxera) is expected to be a major growth driver for FY2026, with new facilities opening in Thailand and Singapore. Management remains focused on “solid execution and operating discipline” to sustain growth.

Product and Market Metrics: Singapore and Australia

• Singapore mobile revenue fell 5.3%, with ARPU down 3.7% to S\$23/month, but data usage per customer jumped 21.9% to 17GB/month. Fixed broadband grew 1.6%.
• Optus mobile revenue in Australia rose 3.2%, with blended ARPU up 1.9% (A\$33/month) and data usage up 12.7% to 21GB/month. Customer base also grew 1.8%.

Investor Takeaways and Price-Sensitive Issues

• Massive exceptional profit driven by asset recycling—likely to boost investor sentiment and trigger re-rating.
• Strong operational momentum despite currency headwinds, with Optus and NCS leading the charge.
• Upcoming data centre expansion points to new catalysts in FY2026, with the potential to transform Singtel’s growth profile.
• Legal risk in Australia could be a swing factor, depending on the outcome of privacy proceedings against Optus.

Conclusion

Singtel’s Q1 2025 update is packed with price-moving news: huge exceptional gains, solid core profit growth, and a clear roadmap for future expansion in digital infrastructure. Investors should watch closely for updates on the Optus privacy case and the ramp-up of Nxera data centres, both of which could have a significant impact on share price in the coming months.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should conduct their own research or consult a financial advisor before making investment decisions. The author does not hold any position in Singtel at the time of writing.

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