Management Discussion and Analysis (Cash Flow)

Management Discussion and Analysis

Cash Flow

	Financial Year ended 31 March
	2018 (S$ million)	2017 (S$ million)	Change (%)
Net cash inflow from operating activities	5,955	5,315	12.1
Net cash outflow for investing activities	(1,951)	(4,832)	-59.6
Net cash outflow for financing activities	(4,009)	(422)	@
Net change in cash balance	(5)	60	nm
Exchange effects on cash balance	(4)	12	nm
Cash balance at beginning of year	534	462	15.6
Cash balance at end of year	525	534	-1.7
Singtel ⁽¹⁾	1,126	1,040	8.3
Optus ⁽²⁾	989	514	92.2
Associates (net dividends after withholding tax)	1,492	1,500	-0.6
Group free cash flow ⁽²⁾	3,606	3,054	18.1
(exclude ATO tax payment)	3,606	3,197	12.8
Optus (in A$) ⁽²⁾	947	500	89.6
(exclude ATO tax payment)	947	634	49.5
Cash capital expenditure as a percentage of operating revenue	13%	14%

“@” denotes >500% and “nm” denotes not meaningful.

Notes:

(1)Refers to Singtel Group excluding Optus.
(2)FY 2017 included S$142 million (A$134 million) paid to the Australian Taxation Office (ATO) for amended assessments under dispute relating to the acquisition financing of Optus.

The Group’s net cash inflow from operating activities for the year grew strongly by 12% to S$5.96 billion. The increase was mainly driven by working capital movements and lower tax payments. Dividend receipts from associates were stable with higher dividends from Telkomsel and Airtel as well as first time dividend from Intouch offset by lower dividends from AIS and the Southern Cross consortium.

The investing cash outflow was S$1.95 billion. In July 2017, Singtel received net proceeds of S$1.11 billion from the disposal of units in NetLink Trust and S$1.10 billion for the repayment of unitholder loan. Other investing cash flows included payments for spectrum purchases of S$937 million, and equity investments of S$337 million for Turn acquired in April 2017 and S$539 million for the 1.7% upstake in BTL in March 2018. Capital expenditure totalled S$2.35 billion, comprising S$783 million for Singtel and S$1.57 billion (A$1.49 billion) for Optus. In Singtel, major capital investments in the year included S$231 million for fixed and data infrastructure, S$178 million for mobile networks and S$374 million for ICT and other investments. In Optus, capital investments in mobile networks amounted to A$880 million with the balance in fixed and other investments.

The Group’s free cash flow increased a robust 18% to S$3.61 billion. The increase was driven by working capital movements and lower tax payments, partly offset by higher capital expenditure.

Net cash outflow for financing activities amounted to S$4.01 billion. Major cash outflows included net decrease in borrowings of S$312 million, interest payments of S$380 million, and payments of S$1.75 billion for final dividends in respect of FY 2017, S$1.11 billion for interim dividends and S$490 million for special dividends in respect of FY 2018.