RMIT-SIM BAFI 1045: Financial Performance of SingTel and Telstra

This report provides a detailed financial performance analysis of SingTel and Telstra, focusing on their recent and historical performance from 2014 to 2020. The analysis includes graphical representations of share price trends, revenue comparisons, and key financial data such as gross profit, net profit, cash and cash equivalents, total liabilities, and total assets. It also examines competitor analysis, comparing SingTel with Telstra, M1, and StarHub, and evaluating their financial ratios like gross profit ratio, net profit ratio, and return on assets. The report highlights revenue fluctuations, profit trends, and the impact of industry competition, providing a comprehensive overview of the companies' financial health and market position. The analysis uses data from various sources including SingTel, The Motley Fool, and other financial reports, to provide a holistic view of the companies' financial health and market position.

[Company name]
Investment
[Document subtitle]

Financial performance
Recent financial performance of SingTel and Telstra
(Source: SingTel, 2020)
From the graph given above with the trends of share price through which it can determine
recent financial performance of SingTel for the last five years. The share price indicates that
there is a volatile trend displaying huge fluctuations. From the above graphical discussion, it
is seen that the share price trend of the SingTel is quite low. The share price of SingTel
remains stable during 2014. In 2015, SingTel received approval to unregister from the list of
ASX. SingTel was removed from the official list of ASX in June 2015 (Dash, and Dash,
2016). Delisting reflects decline in number of SingTel investors representing only .86 percent
of SingTel`s issued capital.
Overtime-financial performance
The evaluation is based on SingTel and the competitors on the basis of financial data as being
reported from 2014 to 2020 (Arsad, Shaari, and Isa, 2017).
Competitor’s analysis

One can evaluate the factors, which affect share price of SingTel`s Groups in this period.
Below are the stock price analysis of SingTel and other competitors such as M1 and StarHub-
(Source: SingTel, 2020)
Stock changes from 2016 to 2020 for Telstra
(Source: Motley Fool, 2020)
This symbolises the impact on competitors and serving them back in terms of higher returns.
The graphical representation shows that in 2020 the share price of Telstra is 3.22.
Furthermore, being the Australia`s largest running provider of the telecommunication and
information related products and services by availing 18.3 million retail mobile services, 1.4
million retail fixed standalone and 3.7 million retail fixed bundles. Here from the above

graph, it is seen that the company has the highest price during 2014-2015, which represents
that the company has been performing well in 2014 and 2015. Whereas, the SingTel has
maintained higher stock price in 2015 and 2016 (The motley Fool, 2020).
Financial data of SingTel
Particulars 2016 2017 2018 2019
Revenue 16961200 16711400 17531800 17371700
Gross Profit 6138000 7054700 7795300 8470500
Cash and cash equivalents 461800 533800 524900 512700
Total liabilities 18563200 20080600 18600100 19105100
Total assets 43565700 4,82,94,200 48253700 48914800
Net Profit 3870800 3852700 5451400 3094500
2016 2017 2018 2019
16200000
16400000
16600000
16800000
17000000
17200000
17400000
17600000
16961200
16711400
17531800
17371700
Revenue
Revenue
To analyse the performance, it is seen that the revenue trends remain fluctuating as the
revenue in 2017 decreased from 2016 and the difference is 249800. It is seen that the revenue
has increased by 820400 in 2018. By 2019, the revenue decreased by 160100 (Setiawan, and
Amboningtyas, 2018).

2016 2017 2018 2019
24800
25000
25200
25400
25600
25800
26000
26200
25911
26013 26011
25259
Revenue
Revenue
The above graphical representation says that the trend for revenues in 2016, 2017, 2018, and
2019 is stable because it lies between 25259 to 26013. The Telstra revenue trend is more
stable as compared to SingTel.
2016 2017 2018 2019
0
1000000
2000000
3000000
4000000
5000000
6000000
3870800 3852700
5451400
3094500
Net Profit
Net Profit
(Source:SingTel, 2020)
ANALYSIS 2016 2017 2018 2019
Gross Profit Ratio (Gross
profit/revenue) 36% 42% 44% 49%
Net Profit Ratio (Net profit/revenue) 23% 23% 31% 18%

Return on assets (Net profit/total
assets) 9% 8% 11% 6%
The net profits of the organization keep fluctuating as shown in the figure, which indicates
that, the net profits remained stable in 2016 and 2017. The company has increased by 8
percent in 2018 and finally it decreased by 13 percent (SEN, 2020).
2016 2017 2018 2019
0%
5%
10%
15%
20%
25%
22%
15% 14%
9%
Net Profit Ratio (Net profit/revenue)
Net Profit Ratio (Net
profit/revenue)
Financial data of Telstra(in $000)
Particulars 2016 2017 2018 2019
Revenue 25911 26013 26011 25259
Gross Profit 18664 18342 17253 16121
Cash and cash equivalents 3550 938 629 604
Total liabilities 27379 27573 27856 28059
Total assets 43286 42,133 42870 42589
Net Profit 5780 3891 3563 2154
ANALYSIS 2016 2017 2018 2019
Gross Profit Ratio (Gross profit/revenue) 72% 71% 66% 64%
Net Profit Ratio (Net profit/revenue) 22% 15% 14% 9%
Return on assets (Net profit/total assets) 13% 9% 8% 5%

The net profit of the Telstra is nearly less than industrial net profitability, which is nearly 15-
20 percent. Therefore, SingTel has been performing appropriately as compared to Telstra
(The motley Fool, 2020).
Competitor analysis
The players are placed at hyper-competitive stage in the life cycle in the industry while
operating in creative destructive environment by foreseeing the level of growth, which has
been improving the telecommunication network.
Telstra has been a major revamp for the Australian retail businesses, which includes new
mobile and also the tablet plan with no extra charges in Australia. This also avails 24/7
technological support that creates more dedication amongst the small business (Gerrand,
2016). The next announcement is rolling out of the Telstra strategy, which delivers simple
products by removing the domestic excess data charges plans and availed more choice for the
customers or mobile package. Telstra is a telecommunication limited, which aims to provide
telecommunication services to both national as well as international customers. It is the
provider of telecommunication items, solutions across the mobiles broadband, telephony and
digital content for the customers in Australia (Gerrand, 2016).
In comparison to the financial health, it is seen that Tesla is highly profitable and it generates
robusting cash flows from the operations. Telstra had demonstrated steady financial health to
maintain healthy balance sheet and income statement. On the other hand, SingTel has
exhibited strengths in profitability regarding strong financial health. SingTel recent reports
was also sound but in major of the metrics, it continues to lag behind to Telstra. Between
both the companies Telstra had strong track of record of growth and it has managed good
jobs in generating higher returns on assets of business in regards to shareholders. SingTel
turns around greater earnings per share has reduced in previous year. It does not attractive
financial performance as Telstra (The motley Fool, 2020).

References
Arsad, R., Shaari, S.N.M. and Isa, Z., 2017. Comparative study on DuPont analysis and DEA
models for measuring stock performance using financial ratio. In AIP Conference
Proceedings (Vol. 1905, No. 1, p. 040007). AIP Publishing LLC.
Dash, R. and Dash, P.K., 2016. A hybrid stock trading framework integrating technical
analysis with machine learning techniques. The Journal of Finance and Data Science, 2(1),
pp.42-57.
Gerrand, P., 2016. The Trollope of Australian telecommunications. Journal of
Telecommunications and the Digital Economy, 4(3), p.5.
Khatri, H., 2019. Competition intensifies as Singapore approaches 90% 4G Availability.
Available on: https://www.opensignal.com/2019/07/26/competition-intensifies-as-singapore-
approaches-90-4g-availability [Accessed on: 14/03/2020]
Setiawan, H. and Amboningtyas, D., 2018. Financial ratio analysis for predicting financial
distress conditions (Study on Telecommunication Companies Listed in Indonesia Stock
Exchange Period 2010-2016). Journal of Management, 4(4).
Telstra, (2020). Stock prices. Available on: https://www.reuters.com/companies/TLS.AX
[Accessed on: 14/03/2020]
The motley Fool, 2020. The Telstra share price sank 8% lower today. Available on:
https://www.fool.com.au/2020/03/12/the-telstra-share-price-sank-8-lower-today/ [Accessed
on: 14/03/2020]