Questions over Optus' performance cloud Singtel's AGM
Citing figures from Singtel's annual report released on Jun 30, these investors not only had questions about the A$100 million (S$83.8 million) penalty that the Australian subsidiary had to pay for alleged sales misconduct; they also asked about Optus' lagging profitability relative to its rivals, despite clocking a 55 per cent jump in Ebit (earnings before interest and taxes).
The intense scrutiny of Optus during Singtel's two-and-a-half hour long annual general meeting (AGM) highlighted the operational challenges faced by Optus, which also included the 2023 nationwide outage in Australia , and the series of reports by whistleblowers and those with grievances.
Financial performance
Optus, the second-largest telco in Australia, achieved an Ebitda (earnings before interest, taxes, depreciation and amortisation) of S$1.94 billion in FY 2025, 5.7 per cent higher than FY 2024's figure of S$1.86 billion, accounting for constant currency.
In a question submitted before the AGM, one investor noted that, compared to the pre-pandemic period, the company's revenue and Ebit were now lower.
In a written response, Singtel said that Optus' Ebit has been hit by a combination of structural and market-specific factors that have reshaped the Australian telco landscape over the past few years.
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'That said, Optus is now on a recovery path,' it added, noting that in FY 2025, Optus delivered that 55 per cent rise in Ebit.
Singtel expects Optus to be a key driver of the group's Ebit. This will be supported by ongoing cost-reduction efforts, rational pricing in mobile and broadband sectors, and further streamlining of the product portfolio, it added in its written response.
However, some shareholders were still unconvinced, with one raising his concern about Optus being left behind by its competitors.
Singtel's group chief executive officer Yuen Kuan Moon, noted that Optus' Ebitda margin was around 27 per cent – lower than the industry's average Ebitda margins of 30 to 33 per cent.
He added that the Singtel management was looking at the capital expenditure needs for Optus to lift its performance, and that this would include exploring network and IT investments.
'We want to ensure that Optus is able to grow progressively and sustainably over time,' he added.
Controversy surrounding Optus
While the financial performance has improved, shareholders wanted to know what steps Singtel would take to restore customer trust following the outage in Australia. Singtel replied that doing this was an ongoing priority for the management, and that 'some improvements' in Optus' reputation metrics have already been noted.
Shareholders also homed in on the more recent Jun 18 A$100 million penalty incurred over Optus' alleged sales misconduct, specifically the selling of mobile phones and plans to vulnerable customers.
Asked about the fallout from the incident, Yuen said Optus is making ongoing efforts to reach out and support affected customers.
One shareholder, referring to the latest group-wide sustainability report, asked the board to clarify the 'disproportionately high volume' of grievances reports involving Optus. The report indicated that Optus accounted for more than half of all reported staff grievances and whistleblower reports.
In a written response, Singtel said that since Optus contributes to approximately half the group's revenues, the proportion is reflected in related metrics, including whistleblower cases.
Looking ahead
Singtel's group chief financial officer Arthur Lang, responding to the questions raised, said: 'We are not happy about where Optus is today.'
Whether it is revenue, Ebitda, Ebit, returns on capital, cash flow – Singtel is working on improving these areas, he said
'We are confident, and we are very focused on making sure that Optus will continue to perform,' he added.
Ten resolutions tabled on Singtel matters for the AGM were resoundingly passed, each garnering at least 94 per cent support. Among them, two concerned the rise in directors' remuneration by S$0.3 million to S$4.9 million, and the re-election of three directors.
Shares of Singtel closed down 1 per cent, or S$0.04, at S$4.03 on Tuesday.
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