Singapore Telecommunications Limited

And Subsidiary Companies

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION, RESULTS OF OPERATIONS

AND CASH FLOWS

FOR THE THIRD QUARTER AND NINE MONTHS

ENDED 31 DECEMBER 2018

With effect from 1 April 2018, the Group has adopted all applicable new and revised Singapore Financial Reporting Standards (International) ("SFRS(I)") and has applied them retrospectively. Accordingly, the comparatives have been restated to take into account adjustments relating to SFRS(I) 1, First-time Adoption of SFRS(I), SFRS(I) 15, Revenue from Contracts with Customers and SFRS(I) 9, Financial Instruments. The financial statements for the periods ended, and as at, 31 December 2018 are unaudited.

Numbers in all tables may not exactly add due to rounding.

For all pages, "@" denotes more than +/- 500%, "*" denotes less than +/- S$0.5 million or A$0.5 million and "**" denotes less than +/- 0.05%, unless otherwise indicated.

For all tables, a negative sign for year-on-year change denotes a decrease in operating revenue, expense, gain or loss.

Table Of Contents

Section 1 : Group

Pg

Financial Highlights ………………… . ………………………………………………………………… 1

Group Summary Income Statement……... ………………………………………………………… 3

Business Segments …………………………………………………………………………………… 4

Review Of Group Operating Performance ………………………………………………………… 5

Sequential Quarterly Results ………………………………………………………………………… 7

Outlook For The Current Financial Year Ending 31 March 2019 ………………………………… 8

Operating Revenue …………………………………………………………………………………… 9

Operating Expenses …………………………………………………………………………………… 11

Staff Costs …………………………………………………………………………………………… . 12

Net Finance Expense ………………………………………………………………………………… 13

Exceptional Items ……………………………………………………………………………………… 14

Tax Expense …………………………………………………………………………………………… 15

Summary Statements Of Financial Position ………………………………………………………… 16

Liquidity And Gearing ………………………………………………………………………………… 17

Cash Flow And Capital Expenditure ………………………………………………………………… 18

Other Information …………………………………………………………………………………… .. 19

Section 2 : Group Consumer

Financial Highlights …………………………………………………………………………………… 20

Group Consumer Summary Income Statement ….. ……………………………………………… 21

Operating Highlights…….………. …………………………………………………………………… 22

Singapore Consumer Summary Income Statement………... ……………………………………… 23

Australia Consumer Summary Income Statement….……….. …………………………………… 26

Section 3 : Group Enterprise

Financial Highlights …………………………………………………………………………………… 30

Group Enterprise Summary Income Statement….. ………………………………………………… 31

Operating Highlights……..………... ……………………………………………………………… .. 32

Singapore Enterprise Summary Income Statement……….. ……………………………………… 34

Australia Enterprise Summary Income Statement ………… . ……………………………………… 35

Section 4 : Group Digital Life

Financial Highlights …………………………………………………………………………………… 36

Group Digital Life Summary Income Statement ………… ... ……………………………………… 37

Operating Highlights………..….. …………………………………………………………………… 38

Table Of Contents (continued)

Section 5 : Associates/ Joint Ventures Pg

Financial Highlights …………………………………………………………………………………… 40

Share Of Results Of Associates/ Joint Ventures …………………………………………………… 41

Proforma Information ………………………………………………………………………………… 49

Other Information ……………………………………………………………………………………… 51

Cash Dividends/ Distributions From Associates/ Joint Ventures ………………………………… 52

Key Operational Data ………………………………………………………………………………… 54

Section 6 : Product Information

Singapore Mobile (Product View) ………………… .. ………………………………………………… 55

Australia Mobile (Product View) ……………………………………………………………………… 56

Singtel TV (Product View) …………………………………………………………………………… 57

Singapore Consumer Home ………………………………………………………………………… 57

Other Products ……………………………………………………………………………………… .. 58

Section 7 : Glossary………………………………………………………………………………… 60

Appendix 1 : Group Summary Income Statements

Appendix 2 : Group Statements Of Financial Position Appendix 3 : Cash Flow Statements of Singapore And Optus Appendix 4 : Optus Financials In Australian Dollars Appendix 5 : Currency Risk Management & Other Matters

Appendix 6 : Outlook For The Current Financial Year Ending 31 March 2019

FINANCIAL HIGHLIGHTS

FOR THE THIRD QUARTER ENDED 31 DECEMBER 2018

  • In constant currency terms1, operating revenue was up 3.7% while EBITDA declined 7.9% on lower NBN migration and voice revenues as well as one-off dispute settlement in the corresponding quarter last year.

  • The associates' post-tax profit contributions declined 31% mainly from Airtel on sustained pricing pressure.

  • Underlying net profit fell 28%.

  • Net profit fell 14% after including higher exceptional gains.

  • Free cash flow fell 51% on weaker operational performance, and timing of ICT milestone receipts and dividend from Telkomsel.

FOR THE NINE MONTHS ENDED 31 DECEMBER 2018

  • In constant currency terms1, operating revenue was up 3.1% while EBITDA declined 4.9%, impacted by reductions in NBN migration and voice revenues.

  • The associates' post-tax profit contributions declined 26% mainly from Airtel and Telkomsel on intense competition.

  • Underlying net profit was down 23%.

  • Exceptional items in the previous financial period was boosted by S$2.05 billion of gain on divestment of units in NetLink Trust. Consequently, net profit fell 51%.

  • Free cash flow declined 9.9% on lower operational performance and timing of ICT milestone receipts partially offset by lower capital expenditure.

1Assuming constant exchange rates for the Australian Dollar, United States Dollar and/or regional currencies (Indian Rupee, Indonesian Rupiah, Philippine Peso and Thai Baht) from the corresponding periods ended 31 December 2017.

Operating revenue

(exclude NBN migration revenues)

EBITDA

(exclude NBN migration revenues)

- EBITDA margin

Share of associates' pre-tax profits

EBITDA and share of associates' pre-tax profits

EBIT

(exclude share of associates' pre-tax profits)

Underlying net profit

(exclude Airtel and BTL)(1)

Exceptional items (post-tax)

Net profit

(exclude Airtel and BTL)(1)

Free cash flow

Underlying earnings per share (S cents) Basic earnings per share (S cents)

0.91.8

13,03013,00612,939 12,824

0.20.9

-10.6-8.3

3,526 3,820

3,435 3,637

-7.7-5.6

27.1% 29.4%

-32.9

1,117 1,941

-42.5

-17.2

-23.7-17.2-28.4-17.2

4,6425,762 2,981 4,0731,865 2,1322,1282,7732,201 2,682

-19.4

-26.8-12.5-23.3

-18.0

@ -14.2-13.4-51.3 -28.5 -14.3

1941,931

-90.0

2,3224,7032,289 4,6252,530 2,806 13.04 16.99 14.22 28.81

-50.6

-50.5-9.9-23.2

-50.6

Total assets Shareholders' funds Net debt(2)

Net debt gearing ratio(3)

Net debt to EBITDA and share of associates' pre-tax profits(4)

Interest cover:

- EBITDA and share of associates' pre-tax profits/ net interest expense(5)

Notes:

  • (1) The profits were adjusted to exclude the results of Airtel and its shareholder, Bharti Telecom Limited ("BTL").

  • (2) Net debt is defined as gross debt less cash and bank balances adjusted for related hedging balances.

  • (3) Net debt gearing ratio is defined as the ratio of net debt to net capitalisation. Net capitalisation is the aggregate of net debt, shareholders' funds and minority interests.

  • (4) Net debt to EBITDA and share of associates' pre-tax profits is calculated on an annualised basis.

5

(5) Net interest expense refers to interest expense less interest income.

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SingTel - Singapore Telecommunications Limited published this content on 14 February 2019 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 14 February 2019 10:06:03 UTC