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These 2 Companies Have Recently Reported Weaker Financial Results

Photo credit: Rafael Matsunaga. Licence: http://creativecommons.org/licenses/by/2.0/

We’re back in the earnings season again.

As is common with every earnings season, there will be some companies posting growth, some companies posting flat numbers, and some companies experiencing declines. So, which are the companies that have recently reported weaker financial results? Let’s look at two of them.

1. Keppel Corporation Limited (SGX: BN4) reported its 2016 full year results last week. As a quick background on Keppel Corp’s business, the company has four different segments: Offshore & Marine; Infrastructure; Property; and Investments.

In 2016, the company’s revenue and earnings per share were down by 34.3% and 48.5%, respectively. Moreover, the company announced a final dividend of S$0.12 per share, bringing 2016’s total dividend to S$0.20 per share. This is 41% lower than 2015’s dividend of S$0.34 per share.

The company’s Marine segment is currently the largest revenue contributor, accounting for 42% of Keppel Corp’s total revenue in 2016. The company’s chief executive, Loh Chin Hua, made the following comment on the prospects of the Marine segment in the earnings release:

“A key development at the end of 2016 was the decision by oil producing nations, both in and outside OPEC, to reduce output, the first cut in over a decade. This brought renewed optimism and confidence to the industry, with oil prices rising to around US$55 per barrel, double the price seen a year ago.

While spending by oil majors is expected to increase, we do not envisage a quick recovery for the offshore business, which continues to be under pressure from weak utilisation of the existing operating fleet, coupled with a supply overhang of newbuilds. We are thus prepared for the challenging conditions in the offshore business to remain for some time.”

2. Local telco M1 Ltd (SGX: B2F) is another company that released its 2016 full year results last week.

M1’s revenue for the whole of 2016 declined by 8.3% while full year net profit dropped by 16%. The company’s total dividend for 2016 was also slashed by 15.6%.

The telco’s performance for the whole year had deteriorated due to an increase in competition. M1’s average revenue per user (ARPU) in its Mobile services business had declined and more than offset increases in subscriber numbers. The company also commented that its “market conditions are expected to remain challenging in the current year.”

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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.