SINGAPORE – More businesses here are starting to feel the strain of rising costs stemming from the war in the Middle East, with companies such as Genting Singapore, Jumbo Group, Kimly, Sheng Siong and ComfortDelGro warning of mounting pressures and a tougher operating environment ahead.
Many Singapore Exchange-listed companies that reported financial results and business updates for the January-March quarter disclosed concerns over how rising energy, freight and supply chain costs arising from the closure of the Strait of Hormuz have trickled into the economy.
This, in turn, is posing demand challenges for their businesses.
The war, which began on Feb 28 when the US and Israel launched strikes on Iran, is now in its 11th week, and its impact is being felt beyond the initial jump in petrol, cooking gas and electricity prices, as well as airfares and taxi fares.
Now, rising costs from the prolonged war are being felt more widely across the economy.
This is beginning to weigh on corporate earnings, with the effects likely to continue unfolding in the months ahead.
One example is softer travel and consumer spending patterns as inflation rises both domestically and globally.
In its first-quarter results announced on May 12, Genting Singapore, which operates Resorts World Sentosa (RWS), said the conflict has raised the cost of sourcing, transporting and delivering goods and services for its business, as higher energy, freight and logistics expenses begin to weigh on operations.
It added that elevated airfares are also dampening travel demand and consumer sentiment, affecting visitor volumes at RWS. In response, it is rolling out targeted promotions, refreshed dining concepts and new attractions to sustain visitor traffic and spending.
