Yield + Growth: What’s Behind Singtel’s Momentum? Interview with CFO Arthur Lang

What happened?

Earlier, I shared that Singtel's share price is at a 5-year high, supported by its strong FY2025 results, a bump in dividends, and ongoing capital recycling efforts.

In this episode of the Beansprout Podcast, I sit down with Singtel Group CFO Arthur Lang to unpack what’s fueling Singtel’s recent momentum—and where the next phase of growth could come from.

We dive into what’s driving the rise in Singtel’s underlying profit and dividends in FY25, how the company plans to return more value to shareholders through its S$2 billion Value Realisation Share Buyback Programme, and the potential impact of its long-term strategy, Singtel28.

Catch the full conversation in the video below.

Interview with Singtel Group CFO: What's driving higher underlying profit and dividends in FY25

03:30 – What’s Driving Singtel’s FY25 Profit Growth

Singtel saw solid profit growth driven by execution across key business units.

• Underlying profit up 9%, EBIT up 20%.
• Optus EBIT surged 55%, while NCS delivered 39% profit growth.
• Cost discipline and focus on core business segments under the SD28 strategy.
• Reinvestment into growth areas rather than legacy operations.

06:00 – Deep Dive into Optus Turnaround

Arthur broke down how Optus transformed its performance in Australia.

• Focused on profitable subscriber growth, especially in postpaid.
• Eliminated “vanity” projects and redundant functions.
• Reprioritised capex to areas with long-term returns.
• Rebuilt credibility after a challenging period.

08:00 – Challenges in Singapore & Telkomsel

Singapore and Indonesia remain competitive markets, but Singtel is adapting.

• Singapore market competitive with 4 telcos and over 12 MVNOs.
• Singtel is focused on service quality and enterprise solutions, not price wars.
• Telkomsel facing pricing pressure, but broadband segment is growing.
• Both markets showing early signs of repair.

11:30 – Singtel’s Regional Strategy & Long-Term Partnerships
 

Singtel’s success outside Singapore is grounded in strong partnerships.

• Strategic stakes in Globe, Airtel, Telkomsel, and AIS built decades ago.
• Partnered with trusted local business families and operators.
• Emphasis on shared values, not just legal contracts.
• Partnerships helped build market leaders in each country.

14:30 – Growth Drivers: NCS & Nxera

Arthur spotlighted the two biggest long-term growth engines.

• NCS is scaling IT services across government, banking, and education sectors.
• Recent delivery centre in the Philippines through Globe JV.
• Nxera benefiting from rising demand for data storage and digital infrastructure.
• Tuas data center to double Nxera's capacity.

19:20 – Yield + Growth = Dual Strategy

Singtel is positioning itself as a rare blend of dividend reliability and structural growth.

• Telco business delivers stable cash flows and supports dividends.
• NCS adds low capex, high-margin tech growth.
• Nxera offers long-term recurring revenue but needs heavy upfront investment.
• Each part of the business serves a different role in the growth engine.

21:20 – Nxera’s KKR Partnership

To fund growth without overleveraging, Singtel brought in a heavyweight investor.

• KKR committed S$1.5 billion for up to 25% stake in NXERA.
• Lets Singtel grow data center footprint across ASEAN without new equity dilution.
• Partnership expands reach into Malaysia, Thailand, and Indonesia.
• Validates NXERA’s potential as a regional data infrastructure leader.

23:40 – Capital Recycling & FY25 Share Buyback Plan

Singtel is unlocking value from existing assets while returning capital to shareholders.

• Raised S$1.9 billion in FY25 from monetising Airtel, real estate, and more.
• Announced S$2 billion share buyback programme.
• Still owns a 28% stake in Airtel worth over S$45 billion.
• Confident in capital recycling as a tool for funding future growth.

27:00 – Is Capital Recycling Sustainable?

Arthur explained how recycling capital is part of a long-term strategy.

• Only non-core or matured assets are divested.
• Singtel won’t sell “crown jewels” just to raise cash.
• More monetisable assets still in the portfolio.
• Capital is being reinvested into high-growth areas like data centers and IT services.

29:50 – The Bigger Plan: Reinvesting Beyond 2028

Planning is already underway for the post-SD28 phase.

• Focus on capital-light models and long-term strategic partnerships.
• Digital banking JV with Grab seeing strong traction in Indonesia.
• New growth beyond telco, including fintech and AI-enabled services.
• Emphasis on finding the right partners with aligned visions and values.

32:45 – Dividend Strategy & VRD (Value Realisation Dividend)

Singtel wants to reward shareholders more directly as value is unlocked.

• Introduced a new Value Realisation Dividend (VRD) framework.
• Tied to gains from capital recycling and asset sales.
• Aims to offer more transparency around how gains are shared.
• Supports total return to shareholders alongside ordinary dividends.

36:30 – $2 Billion Share Buyback Rationale

The buyback is a confidence statement.

• Aligns with Singtel’s improving financial strength and valuation.
• Gives flexibility to return capital without committing to permanent dividend hikes.
• Adds to EPS (earnings per share) over time.
• Reflects confidence in long-term value creation.

38:45 – Singtel’s Financial Resilience & Balance Sheet Strength

Singtel has the financial firepower to navigate future uncertainty.

• Debt is mostly fixed-rate, protecting against rising interest rates.
• Net debt-to-EBITDA at 1.5x, interest cover at 18x.
• FX risk is managed through active hedging of overseas dividend flows.
• Capital partnerships like KKR further strengthen liquidity.

41:40 – Singapore Market Competition & 5G+ Differentiation

Singtel is taking a premium approach in a tough market.

• Avoiding price wars by using sub-brands like Gomo and Heya for price-sensitive customers.
• Focused on 5G+ rollout, which offers prioritised network access at high-demand locations.
• Similar to premium airline seating—different experiences for different user needs.
• Singapore remains a strong contributor to group EBIT despite competition.

45:45 – Leadership, Risk, and Growth Mindset

Arthur shared personal leadership lessons from his cross-industry journey.

• Importance of backing people early and trusting them to grow.
• Risk is inevitable, but avoiding all risk is itself a risk.
• Emphasis on balancing bold decisions with execution readiness.
• Encouraged a mindset of adaptability, trust, and long-term thinking.

Check out Beansprout's guide to the best stock trading platforms in Singapore with the latest promotions to invest in Singtel.

Related Links:

• Singtel share price history and share price target
• Singtel dividend history and dividend yield

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