These 3 Companies Reported Weaker Performances Last Week

As the earning season draws to a close, my colleagues have been busy digesting the latest financial performances of many Singapore companies.

As we are probably aware, 2016 is proving to be slightly more challenging in term of economic growth. Moreover, market uncertainties have increased as “unexpected” events such as Brexit and Mr Trump’s winning the US Presidential election have become reality.

Additionally, many industries such as oil and gas, construction, shipping and banking are seeing challenging times ahead. Yet, these challenges are not limited to the above industries. Three companies have recently announced weaker results too.

Frasers Centrepoint Ltd (SGX: TQ5) reported full-year result last week. As a quick summary, Frasers Centrepoint is a diversified property company focussed on property development and investments in Singapore, Australia, China and others.

Full-year revenues were down by 3.4%, while profit attributable to shareholders came in lower by 22.6% year-on-year. As a result, diluted earnings per share (EPS) for the year saw a 26.7% drop from 24.89 cents to 18.24 cents.

Despite the weaker performance, the company announced a final dividend of 6.2 cents per share, bringing the full-year dividend to 8.6 cents. This is unchanged from a year ago.

The decrease in Frasers Centrepoint’s revenue and profit during the year was due to lower contributions from the Singapore, Australia, and International Business business units.

Vicom Limited (SGX: V01) is another company that released third-quarter earnings last week. As a quick introduction, Vicom is a leading provider of technical testing and inspection services with operations primarily in Singapore.

The company is majority-owned by land-transport giant ComfortDelGro Corporation Ltd (SGX: C52).

In his summary of Vicom’s latest result, my colleague Chin Hui Leong argues that the 8% decline in profit for the quarter is an improvement compared to the 6.9% decline in sales and 12.6% decline in profit seen in the previous quarter.

Revenue for the third-quarter was flat from the same quarter a year ago, whilst net profit fell by 7.8% year-on-year to $6.9 million. As a result, earnings per share were down 7.8% during the period.

On a positive note, Vicom has around $96 million in cash and equivalents and no debt. This is a slight increase from the net cash balance of $91 million recorded a year ago.

Singapore Telecommunications Limited (SGX: Z74) is Singapore’s largest telecom, ahead of both StarHub Ltd. (SGX: CC3) and M1 Ltd (SGX: B2F).

It was the last of the three telecoms to announce its quarterly result.

In line wit its peers, Singtel also reported a weaker performance in the quarter, with net profit and earnings per share down by 6% and 5.6% respectively. Singtel has also lowered its outlook for the rest of the fiscal year.

The company now expects its earnings before tax, interest, depreciation and amortisation (EBTIDA) to be stable and its revenue to decline by a low single digit percentage. Previously, it expected to grow its revenue and EBITDA at low single-digits. 

Despite the weaker performance, SingTel is free cash flow positive. It also grew its free cash flow.

For more detailed financial information about the company’s latest result, please click here for the article written by my colleague Chin Hui Leong.

For more companies that have reported weaker performances in this season, please click here and here.

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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 Lawrence Nga doesn’t own shares in any companies mentioned.