UPDATE 3-SingTel profit beats forecast on Asia mobile growth

(Adds quotes from briefing, share price)

By Jennifer Tan

SINGAPORE, May 14 (Reuters) - SingTel (STEL.SI: Quote, Profile, Research), Southeast Asia's largest phone company, beat market forecasts with a 9 percent rise in quarterly profit, thanks to rapid mobile user growth especially in India, but it warned of an uncertain outlook.

State-controlled Singapore Telecommunications (SGT.AX: Quote, Profile, Research), which derives about three quarters of its sales outside Singapore, kept its target of delivering double-digit underlying earnings growth over the medium term.

It also raised its dividend payout ratio to 45-60 percent of underlying net profit, from 40-50 percent.

"The environment remains challenging with the outlook for the global economy looking more uncertain," Chief Executive Chua Sock Koong said, adding that the group's fundamentals remained strong.

Together with 30-percent-owned Indian associate Bharti Airtel Ltd (BRTI.BO: Quote, Profile, Research), SingTel is in talks with South African operator MTN Group Ltd (MTNJ.J: Quote, Profile, Research) for a potential acquisition, but the negotiations were "at an extremely preliminary, exploratory stage", Chua told reporters.

Singapore's largest listed firm forecast single-digit growth in revenues for Singapore and Australia, but double-digit growth in earnings contributions from its regional mobile associates.

"The results were better than expected, thanks to Singapore and Thailand and a lower-than-expected tax rate, but we expect lower contributions from the associates going forward, due to a price war in Indonesia and slower growth in the Philippines," said DBS Vickers Securities analyst Sachin Mittal.