NetLink NBN Trust Reports 9M FY26 Financial Results: Key Highlights and Investor Analysis

Overview

NetLink NBN Trust has released its financial results for the nine months ended 31 December 2025 (9M FY26). The report highlights stable revenue growth, a resilient business model, and continued disciplined financial management, but also notes a dip in profitability metrics. The Trust remains well-capitalized with significant debt headroom and strong credit metrics.

Key Financial Highlights

• Market Capitalisation: S\$3.8 billion, with a unit price of S\$0.965 as at 31 December 2025.
• Revenue: Increased 1.6% year-on-year to S\$313.0 million (9M FY25: S\$308.2 million).
• EBITDA: Slight decrease of 0.6% to S\$215.5 million (9M FY25: S\$216.8 million).
• EBITDA Margin: Fell from 70.4% to 68.8%, a decrease of 1.6 percentage points.
• Profit After Tax (PAT): Down 11.8% to S\$65.4 million (9M FY25: S\$74.1 million).
• Net Gearing: 20.3%, now calculated as Net Debt divided by Total Assets for improved comparability.

Operational Highlights

• Residential Connections: Remain stable at 1,517,049 as of 31 December 2025. Minor net quarterly fluctuations were attributed to Retail Licensees (RLs) deactivating dormant lines during internal housekeeping.
• Non-Residential Connections: Decreased slightly to 52,574 due to end-user churn between RLs.
• Non-Building Address Points (NBAP) and Segment Connections: Continued growth, indicating sustained demand from mobile network rollouts, with NBAP at 3,556 and Segment connections at 4,244.

Revenue Breakdown and Business Model Resilience

NetLink’s business model is underpinned by predictable cash flows, long-term contracts, regulated revenues, and a creditworthy customer base. The company’s revenues are diversified across:

• Residential connections
• Non-residential connections
• NBAP & Segment connections
• Ducts and manholes service revenue
• Central office revenue
• Co-location revenue
• Installation-related and ancillary project revenue

Notably, the increase in overall revenue was mainly attributed to higher co-location and ancillary project revenue, partially offset by lower contributions from connections and ducts and manholes service revenue.

Profitability and Expenses

• EBITDA: Slightly down due to higher operating expenses, notably property tax for the Seletar Central Office and increased IT-related costs.
• Depreciation & Amortisation: Up 6% to S\$138.9 million, reflecting a larger asset base.
• Net Finance Costs: Increased by S\$1.9 million (up 13.6%) due to higher borrowings and lower interest income, partly offset by lower interest expense on existing debt.
• Profit After Tax: Decreased, mainly due to higher depreciation and finance costs, partially offset by a higher income tax credit.

Balance Sheet and Cash Flow

• Gross Debt: S\$990 million as of December 2025, up from S\$856 million at March 2025.
• Weighted Average Debt Maturity: Extended to 3.4 years (from 1.3 years), supported by the issuance of S\$300 million 10-year fixed-rate notes at 2.65% in September 2025.
• Net Debt/EBITDA: 2.7x, up from 2.4x, but remains within manageable levels.
• Borrowings at Fixed Rate: 100%, up from 70.1% previously, mitigating interest rate risk.
• EBITDA Interest Cover: 12.8x, indicating robust ability to meet interest payments.
• Effective Average Interest Rate: Decreased to 2.39% from 2.72%.
• Operating Cash Flow: Strong generation, with S\$215.5 million net cash from operating activities, supporting both capital expenditure and distributions.

Strategic and Price-Sensitive Developments

• Debt Management: The successful refinancing and extension of debt maturity at attractive rates strengthens the Trust’s liquidity and reduces refinancing risk, a positive for credit ratings and investor confidence.
• Revenue Growth Sources: Growth in co-location and ancillary project revenues signals continued relevance and adaptability of the business model, partially offsetting declines in other segments.
• Profitability Pressure: The decline in PAT and EBITDA margin, mainly due to higher operating and finance costs, could be a concern for investors focused on bottom-line growth and may influence share price in the short term.
• Stable Residential Base: The stability in residential connections, despite minor churn, underscores the resilience of NetLink’s core business, but shareholders should monitor any further declines in non-residential and connection revenues.

Conclusion

NetLink NBN Trust remains a defensive investment choice, underpinned by regulated revenues, stable cash flow, and prudent financial management. However, investors should note the pressure on profitability, especially from rising expenses and finance costs, which may weigh on future distributions and share price performance.

Contact for Investors and Media

Mr Victor Chan
[email protected]

Disclaimer

This article is for information purposes only and should not be construed as investment advice. Forward-looking statements are subject to risks and uncertainties; actual results may differ materially. Readers should conduct their own due diligence and consult with their financial advisors before making investment decisions.

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