FY 2024 Full-Year Financial Results Webcast & Q&A Session

Thanks for the presentation. On M1, could you share more about how M1 is driving a higher EBITDA margin, despite a lower postpaid subscriber base? On the subsea cables, could you share more about these two new projects that you are embarking on and the 30 fibre pairs that you mentioned? Are these the main pairs or do they include the branch pairs? How should we think about Keppel’s share of these fibre pairs? And a sub question on that – any idea of how valuations are actually trading for these assets and how should we think about pricing for these fibre pairs that you may sell?

LCH

I shall ask Mann to deal with the first question and also part of the second question.

MSM

Thanks for the question. On M1, like we shared, digitalisation is driving down our cost to serve, which is a very important part of our digital journey and what that does is to reduce our overall cost and helps in our EBITDA. While it is true that the market is extremely competitive, and the postpaid base is going down, but equally, the SIM-only base is growing. So, as we become more digitalised and we acquire customers more online, our cost to acquire is also going down. So overall, the cost management that we have been doing over this digitalisation journey is helping us get our EBITDA stable, or in fact growing, as we have shown. On the two new cable system projects comprising over 30 fibre pairs, it is a little too early to share too many details on them at this point in time. Like what CEO shared in his opening remarks, these are two systems that are going to connect Southeast Asia with North Asia and beyond. We have already started talking to some of our partners in co-developing these two cable systems. But, it would not be appropriate at this point in time to share how many fibre pairs Keppel will have, what is the price that we will be selling them at and so on, because at this point in time, our focus is to make sure that we are able to deliver Bifrost by the end of 2025 as we promised. Getting the ready-for-service status by end of 2H 2025 is what we are working towards. So, the two new cable systems are still in the pipeline, but this is the more immediate system that we want to deliver.

LCH

Thank you, Mann. Maybe just to supplement what Mann said: On M1, I think he mentioned about the cost management going on quite well, but on top of that, I think our enterprise side is also growing and that has also helped. This is under AsiaPac. So, that is something on the information and communication technology (ICT) side where we are seeing quite good growth. We see a potential that this ICT business will dovetail very well with our growing data centre business, as well as digital connectivity business, in terms of tapping a different pool of customers from what we are currently tapping, which are mainly the hyperscalers. The new subsea cable systems are still in early days. But just to give a sense, we have reported that we are likely to get above 30% internal rate of return (IRR) for Bifrost. But it was an unusual circumstance, because we were able to lock in the costs very early on. Because of the scarcity value – there were no new systems (linking Southeast Asia to the United States) approved by the United States Federal Communications Commission in the last eight years – we are getting a bit of a price premium on the fibre pairs. So I would say that for the new systems, we would probably be expecting returns of probably in the mid-teens on an IRR basis. So 30% is not usual. But of course, if we get it, we are very happy. But I think the key is really operating and maintaining these cables. As I have shared in the past, each time we build one of these systems, we create returns for our investors, as well as for ourselves, but we also layer on top the operating and maintenance fees that go on for 25 years. We have shared that for Bifrost, each fibre pair is expected to attract, on average, about S$200 million worth of operating and maintenance fees over the life of the 25 years. So we are quite excited by this and I think besides doing this for Keppel and our customers, this is also a very good way to continue to enhance Singapore's position as a digital hub. On dividend payout ratio, I think for 2H 2024, I am getting about a 55% payout ratio. I think in the last two halves, you had previously pushed as much as 75%. So, just wondering what the thinking is and how should we think about the payout ratio for 2025? Thank you.