Singtel raised profit guidelines, saying the impact of Nvidia-related developments was “quite limited”

The Zhitong Finance App learned that Singapore Telecom (Singtel) said that the company was largely unaffected by Nvidia (NVDA.US) related events, and only a small portion of data center computing power resources were leased to or linked to the chip manufacturer's new cloud customers.

Group Chief Financial Officer Arthur Lang said in an interview on Friday: “I think the impact on us was quite limited.” At the same time, he said that Singtel is closely monitoring the relevant situation.

Lang revealed that less than 5% of the company's data center capacity was leased to new cloud customers likely linked to Nvidia. Over 80% of data center resources are distributed locally in Singapore, and tenants are mainly enterprises, banks and government agencies.

As demand for artificial intelligence and enterprise cloud services rises, Singtel continues to increase its digital infrastructure business. Lang said the company adopted a steady and prudent expansion strategy, prioritizing investment in projects with locked customer contracts, and relied on its own balance sheet and bank financing.

Benefiting from the positive outlook for the Australian business, technical services and digital infrastructure sectors in the first half of the year, the company raised its profit forecast for the whole year. It is currently anticipated that core operating profit will grow in the medium to high single digits for the fiscal year ending March 2027; previous guidance was a low to medium single digit increase.

After the results were released, Singtel's shares listed on the Singapore Exchange surged by about 3%, the biggest one-day increase since August this year.

In the half year ending September, the company's basic net profit rose 10% year over year to SGD 1.49 billion (approximately US$1.2 billion). Net book profit fell 55% to SGD 1.54 billion, mainly due to one-time proceeds from the disposal of Batty Telecom shares and the merger of Intouch and Gulf in the same period last year, and no similar income was recorded in the current period.

Singtel's growth is increasingly dependent on businesses outside the mainland, including Telekom subsidiary Optus, technology service provider NCS, and the continuously expanding data center and AI infrastructure business; at the same time, the company also holds shares in many of Asia's leading telecom operators.

Optus benefited from increased mobile tariffs, increased prepaid users, and increased mobile service revenue by 2.9%. NCS also performed well, with the Homeland Security business continuing to expand, and demand for AI and digital resilience-related projects picking up. Its digital infrastructure division (Digital InfraCo) has benefited from the rise in data center business prosperity and the expansion of AI cloud business.

Competition in the Singapore local market remains fierce, and mobile service revenue fell 1.6% year over year.

Singtel said in the announcement: “The inflationary environment and weakening regional currencies mean that there are still challenges ahead. The Group will strictly abide by execution discipline, do a good job of cost control, and operate steadily in a complex environment.”