So I was debating with my friend on Optus which was purchased by Singtel in 2001. Its been 10 years since then so we could probably assess how well it has done for Singtel.
Here is a look at the investments on each subsidiary and the profit generated based on Singtel’s 2011 Annual Report:
The first conclusion is that
Optus is important to Singtel. It contributes 31% to Singtel’s bottom-line which is the second highest behind Singapore’s contribution.
But that is only part of the picture.
Optus ranks the lowest in terms of return on assets. (Return on assets shows for $1 dollar of assets how many cents of profit is generated)
The level of assets invested in Optus is astounding.
If Optus ROA is that of Bharti, they
would have generated 1 billion of extra profit. That is a 2% boost to your free cash flow or dividends.
Using ......
