Moody’s Ratings has affirmed Singapore Telecommunications Limited’s (Singtel) A1 senior unsecured rating and a3 Baseline Credit Assessment (BCA), maintaining a stable outlook. This decision reflects Singtel’s strong market presence in Singapore and Australia, its diversified cash flow from Asian mobile associates, and its substantial financial flexibility through asset recycling initiatives.
Singtel’s A1 rating incorporates its a3 BCA, highlighting its well-established and geographically diversified business platform. Moody’s also expects strong support from the Government of Singapore through Temasek Holdings, which contributes to a two-notch uplift in the rating. Despite facing intense competition in its core markets and a depreciating Australian dollar, Singtel’s profitability is expected to be bolstered by cost-saving measures and earnings growth from regional mobile associates like Bharti Airtel and AIS.
The company anticipates an improvement in its EBITDA margin to 40-41% over the next 12-18 months. In May 2025, Singtel increased its asset monetisation target to $6.6 billion (SGD9 billion), with proceeds earmarked for growth initiatives, dividend payments, and a share buyback programme of up to $1.5 billion (SGD2 billion) over three years. However, Singtel’s adjusted free cash flows are projected to be negative in fiscal 2026 and 2027 due to higher dividends and ongoing capital expenditure.
Singtel’s liquidity remains strong, supported by a well-staggered debt maturity profile and robust access to funding. Governance risks are mitigated by a board with a majority of independent directors, ensuring compliance with Singapore Exchange regulations.
Looking ahead, Singtel’s stable outlook is supported by its dominant market position and diversification efforts. The company aims to reduce leverage towards 2.0x over the next two to three years. Potential rating upgrades or downgrades will depend on Singtel’s financial performance and its relationship with the Singapore government.
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