Commentary

Telco stocks in Australia and New Zealand have seen wide spreads in performance over the last 12 months. Economic growth is expected to remain sluggish relative to previous years, creating uncertain performance for telco equities.

Megaport

Megaport’s stock fell 6% in the last month, with an equivalent drop occurring on one day on April 29th when the company released an FY24 EBITDA guidance upgrade. Typically, increased profit would be a positive for the Megaport share price, the decrease may have stemmed from a decrease in EBITDA from $15.1m in 2Q24 to $14.0m in 3Q24 which was detailed in an accompanying operational update. The FY24 EBITDA guidance upgrade was announced to be in the range of $56 million to $58 million, an increase on the previous FY24 guidance of between $51 million to $57 million.

Singtel

Singtel shares fell 8.5% in the month with speculation about the company divesting its 20% stake in Optus leading to a 4% drop on a single day on April 2nd. The company then ruled out any upcoming divestment through a company announcement. Reports said talks had ended as the parties were unable to agree on certain terms involving the valuation and price aspect of a possible transaction. At the end of the month, Singtel also announced a AU$3.1B writedown of its Optus assets.

Pentanet

In the last month Pentanet’s declined around 26%, more than offsetting last months gain after the company announced its partner agreement with NVIDIA had been expanded. On April 2nd, the company completed a $4.28m placement through the issuing of new ordinary shares. On April 30th the company released a 3Q24 update detailing marginal increases in revenue and gross profit.

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