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Singapore’s Big Loser for the Week: 800 Super Holdings Ltd

For the Chinese New Year-shortened week, 800 Super Holdings Ltd (SGX: 5TG) tumbled by 5.2% from last Friday to close at S$0.455 on Wednesday.

With the Straits Times Index (SGX: ^STI) edging up 0.3% during the same timeframe, it makes the company one of Singapore’s big losers for the week.

800 Super is one of the four waste management companies in Singapore. On top of waste management, the company also provides recycling, cleaning and conservancy, and horticultural services.

Shares of the waste management firm had dipped despite it releasing two pieces of positive news in the past two weeks.

On 16 February 2015, 800 Super announced that it had been awarded contracts worth around S$39 million by the Ministry of Home Affairs “to provide cleaning and horticultural services for the east and west regions of Singapore.” The contracts span three years, starting from 1 April 2015 and ending on 31 March 2018.

A week before that, the company released its financial results for the six months ended 31 December 2014 (HY 2015). Revenue came in at S$64.5 million, up an impressive 23.7% from a year ago. The growth was mainly attributable to the “award of new contracts and contracts re-awarded at revised pricing.”

The approximately S$12 million increase in revenue trickled down to the bottom line as 800 Super’s net profit more than doubled from S$2.3 million a year ago to S$4.6 million in HY 2015.

This happened despite staff costs and other expenses increasing by 30.4% and 16.5% respectively. Staff costs went up due to a higher headcount and higher salaries; meanwhile other expenses had grown on the back of increases in foreign worker levies.

Mr Lee Koh Yong, the Executive Chairman of 800 Super, commented on the company’s results:

“The Group has performed well in HY2015, delivering strong results despite tight competition in the market and an increase in costs due to higher worker levy and wages. We will continue to manage our operations to provide service quality, delivery and pricing so as to continue to deliver value to our stakeholders.”

The firm is now trading at 7.2 times its historical earnings.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.