Singtel warns of inflationary challenges, after Q1 profit jump

Telecommunications Ltd (Singtel) on Wednesday warned of a challenging operating environment due to rising inflation and interest rates, after posting a 41% jump in June quarter profit.

Companies around the world are facing pressure from rising labour and fuel costs, prompting them to take a number of belt-tightening steps to avoid a hit to their profit margins.

“We will need to stay nimble and contend with these realities should they put further pressure on our costs and bottomlines,” Chief Executive Yuen Kuan Moon said in an exchange filing.

The southeast Asia’s largest telecom firm, which is in the midst of a strategic reset of its infrastructure, said net profit for the first quarter ended June 30 was S$628 million ($450.15 million), compared with S$445 million a year ago.

The net profit included an additional gain from the divestment of a 70% stake in its Australian tower network to superannuation fund AustralianSuper for A$1.9 billion. The proceeds of which, it had said, would be used to fund 5G rollout and data centers.

The jump in profit was fuelled by partly owned Bharti Airtel’s resilient turnaround, which earlier this month, reported a 22% jump in quarterly revenue, boosted by high-speed 4G subscriber additions and higher data consumption.

Singtel had in May forecast a stronger fiscal 2023 led by a strong uptake for its 5G networks.