5 Key Highlights from Netlink NBN Trust’s Resilient Earnings Growth in Q3 FY2024

February 8, 2024

In the digital age where connectivity is as crucial as electricity, Netlink NBN Trust (SGX: CJLU), or more commonly known as NLT, shines as a beacon of innovation and resilience. Reporting a commendable 4% rise in profit after tax for the 9MFY2024, NLT has once again underscored its pivotal role in underpinning Singapore’s broadband infrastructure. With revenue up by 3.2% to S$309.4 million, driven by heightened connection and installation activities, the Trust’s strategic agility and operational excellence are on full display.

As we delve deeper into NLT’s journey, it’s clear that its trajectory is not just about connecting points A to B; it is about powering Singapore’s digital ambitions.

Here are five key highlights from its 9M FY2024 earnings results.

1. Consistent Revenue Growth

NLT reported a solid 3.9% year-on-year (yoy) revenue growth in Q3 FY2024, demonstrating its ability to sustain growth amidst fluctuating economic conditions, driven by an increase in fibre connections and installations.

2. Expansion of Fibre Network

The Trust saw significant growth in its fibre connections across residential, non-residential, and non-building address points, showcasing its commitment to expanding Singapore’s digital infrastructure.

3. Strategic Investments for Future Growth

NLT’s investments in new central offices, upgrades for a 10Gbps fibre network, and IT system enhancements are pivotal for Singapore’s transition towards higher bandwidth capabilities, ensuring NLT’s long-term growth.

4. Attractive Dividend Yield and Resilient DPU Growth

With a forecasted DPU growth of 2% per annum through to FY2030 and a forward dividend yield of 6.4% for FY2025, NLT presents an attractive proposition for investors seeking stable and growing returns. This will be supported by its strong operating cash flow generation.

5. Robust Financial Health

NLT’s healthy balance sheet, with a net gearing of 24.3% and a significant portion of its debt hedged at fixed rates, underpins its financial stability and operational resilience.

Attractive investment option for long-term investors

In an era where seamless digital connectivity is the backbone of economic and social advancements, NLT stands out as a provider of essential infrastructure and as a visionary architect of Singapore’s digital future. The Trust’s impressive 9M FY2024 performance is a testament to its unwavering commitment to growth, innovation, and sustainability. As NLT continues to expand its fibre network and explore new investment horizons, it secures its position as a pivotal player in the connectivity landscape and offers a promising avenue for investors looking towards the digital infrastructure sector. With strategic initiatives aimed at enhancing Singapore’s broadband capabilities and a solid financial foundation, NLT is well-positioned to navigate the opportunities and challenges of the digital age.

Disclaimer: ProsperUs Head of Content & Investment Lead Billy Toh doesn’t own shares of any companies mentioned.

Billy Toh

Billy is deeply committed to making investment accessible and understandable to everyone, a principle that drives his engagement with the capital markets and his long-term investment strategies. He is currently the Head of Content & Investment Lead for Prosperus and a SGX Academy Trainer. His extensive experience spans roles as an economist at RHB Investment Bank, focusing on the Thailand and Philippines markets, and as a financial journalist at The Edge Malaysia. Additionally, his background includes valuable time spent in an asset management firm. Outside of finance, Billy enjoys meaningful conversations over coffee, keeps fit as a fitness enthusiast, and has a keen interest in technology.

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