Singtel should take a leaf from Keppel's book when it comes to investor communications, Companies &
WHEN I heard last week that Singtel was appointing a new CEO, my first thought was that it could be time to buy the stock.
Then I read the news release from the company, and changed my mind.
Among other things, the news release suggested that Singtel's outgoing CEO, Chua Sock Koong, is leaving the company well-positioned for the future; and that new CEO, Yuen Kuan Moon, will build on the success Singtel has achieved.
For investors like me, these are not harmless platitudes but a worrying signal that Singtel's board and senior management - who surely must have endorsed the news release - do not plan to change the way the company is run and unlock the potential value of its depressed shares.
Singtel has none of the hallmarks that investors would ordinarily associate with being successful and well-positioned for the future.
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This column pointed out back in August that Singtel generates less earnings now than it did a decade ago. Its cumulative "underlying" earnings per share for FY2018 to FY2020 is almost 24 per cent lower than for FY2010 to FY2012. (Singtel has a March 30 financial year-end).
Singtel also has a balance sheet burdened with significantly more debt than 10 years ago. It ended FY2020 with net debt of S$12.5 billion, almost twice the net debt of S$6.3 billion it had at the end of FY2010.
Moreover, Singtel's accumulation of debt has outpaced its profit growth. For FY2020, the ratio of Singtel's net debt to its earnings before interest, taxes, ....