Netlink NBN Trust reports FY2023 DPU of 5.24 cents, 2.1% higher y-o-y

Felicia Tan
3-min read

The trust's FY2023 DPU of 5.24 cents is the highest NetLink has distributed since listing.

Netlink NBN Trust CJLU has reported a distribution per unit (DPU) of 2.62 cents for the 2HFY2023 ended March 31, 1.9% higher y-o-y. This brings the trust’s DPU for the FY2023 to a total of 5.24 cents, 2.1% higher y-o-y.

Distributable income also rose by 2.1% y-o-y to $204.2 million.

“Our resilient business model continues to generate stable cashflows, enabling NetLink Group to deliver stable and growing returns to unitholders in FY2023. Our FY2023 DPU of 5.24 cents is also the highest NetLink has distributed since listing,” says Tong Yew Heng, CEO of the trustee-manager.

Netlink’s revenue for the FY2023 grew by 6.8% y-o-y to $403.5 million as revenue grew across all categories of services except for Central Office revenue and ducts and manholes service revenue.

Ancillary project revenue rose by $15.6 million as more projects were completed during the year while non-building address point (NBAP) and segment connections revenue rose by $3.9 million because of higher demand for point-to-point connections to support mobile network rollout and other projects requiring high resiliency.

Residential connections revenue increased by $3.5 million from higher number of connections of 1.49 million connections as at March 31, up from the 1.46 million connections as at March 31, 2022. Co-location revenue was $2.0 million higher due to higher power charges.

Ebitda rose by 10.5% y-o-y to $295.0 million mainly due to the increase in revenue, higher other income and lower staff costs and operating expenses.

Other income rose by 83.3% y-o-y to $5.9 million mainly due to the recovery of costs from the Land Transport Authority (LTA) for work done to accommodate the construction of Jurong Regional Line and higher interest income from fixed deposit.

FY2023 operating expenses were significantly lower because of the $12.4 million remeasurement loss recorded in FY2022 due to the reduction in rental rates upon the renewal of the Central Office lease agreements.

Ebitda margin rose by 2.4 percentage points y-o-y to 73.1%

Profit after tax rose by 19.7% y-o-y to $109.3 million.

Earnings per unit stood at 2.80 cents on a diluted basis.

As at March 31, cash and cash equivalents stood at $200.7 million.

“Our balance sheet and liquidity remain strong, with access to financial resources to support future capital expenditure. We remain focused on leveraging growth opportunities arising from the digital economy, Singapore’s Smart Nation initiatives and 5G deployment nationwide. Looking ahead, we will continue to invest in our network assets to cater to the growing end-user demand across residential, non-residential, NBAP and segment connections to improve our competitive edge,” says Tong.

Looking ahead, the trust says its prospects remain uncertain although it will “continue to keep a watchful eye on the evolving macro environment and take necessary mitigating measures”. That said, the trust’s business model is “resilient” and “well supported by predictable revenue streams”.

“The ongoing review of the terms and conditions (including prices) of NetLink’s services offered under its interconnection offer by the Infocomm Media Development Authority (IMDA) is expected to be completed this calendar year,” says Netlink.

Units in Netlink closed flat at 88.5 cents on May 18.

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