(Reuters) – Singapore telecoms on Monday forecast impairment provisions of S$3.1 billion ($2.28 billion) for the second half of 2024, leading the telco giant to report a net loss for the period.
The company also warned it would report lower net income for the full year ended March 31, 2024.
About S$2 billion of the total impairment provision comes from mobile network operations unit Optus’ goodwill, Singtel, Southeast Asia’s largest telecom operator, said in a statement.
A “pending deal” for Optus was recently ruled out by Singtel following reports that talks over a potential stake sale had fallen apart.
Singtel added that Optus expects non-cash impairment provisions for its enterprise fixed access network assets of S$470 million, mainly due to weaker outlook, higher cost of capital and gloomy macroeconomic outlook.
After conducting a strategic review of its enterprise business, Optus found it was reporting a sharp decline in fixed-line revenue, consistent with the overall market decline in Australia, Singtel said in a statement.
Among other divisions, Asia Pacific Cyber Security is expected to report a non-cash goodwill impairment provision of S$340 million, of which S$280 million is expected from IT services provider NCS Australia.
“Singtel is on track to pay the top portion of its dividend policy for the financial year ended 31 March 2024,” the Singapore-based telco said.
The company plans to release results for the fiscal year ended March 31 on May 23.
In a separate announcement on Monday, Singtel said its Optus unit had struck a deal with local rival TPG Telecom to provide access to its local radio network in regional Australia.
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($1 = 1.3616 Singapore dollars)