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Here Are 2 Companies That Recently Delivered a Mixed Performance in Their Latest Earnings

We’re back in the earnings season again!

As it is with every earnings season, there will be some companies posting growth, some delivering a mixed performance, and some experiencing declines in their business. So, which are the companies that have turned in a mixed performance with their latest earnings releases? Let’s look at two of them:

1. Singapore Post Limited (SGX: S08) delivered its earnings for the quarter ended 31 December 2016 three weeks ago.

The company is primarily in the business of providing mail and logistics services. Its business is currently organized into three major segments: Postal, Logistics, and eCommerce.

During the reporting quarter, Singapore Post’s revenue leapt by 16.8% year-on-year, but its profit attributable to shareholders came in 27.9% lower. The latter also led to the company’s diluted earnings per share falling by 30% from the same quarter a year ago.

Singapore Post’s logistics business segment saw a 30% fall in operating profit due to pricing and cost pressures while the postal segment’s operating profit also dipped by 6.6% on the back of lower domestic mail volume.

Perhaps, the biggest item in Singapore Post’s earnings release that caught the market’s attention is the company’s warning that there is a “risk of significant impairment” of the value of one of its subsidiaries. TradeGlobal, the subsidiary in question, was acquired only in October 2015 for US$169 million; it is a US-based end-to-end eCommerce services provider.

Singapore Post will decide on any impairment for TradeGlobal after it has had a chance to study the US subsidiary’s business performance for the year ended 31 March 2017. Singapore Post has not been satisfied with TradeGlobal’s results since making the acquisition.

2. DBS Group Holdings Ltd (SGX: D05), Singapore’s largest bank by total assets, reported its earnings for the quarter ended 31 December 2016 two weeks ago.

The bank reported 5% year-on-year growth in total income (revenue for the bank) in the reporting quarter, driven primarily by improvement in non-interest income that is partially offset by weaker net interest income. Yet, an increase in allowances for credit and other losses (a big 87% jump) had partly resulted in a 9% year-on-year decline in net profit for DBS Group in the quarter.

Despite the lower net profit, there were some positive takeaways. For instance, the bank remains very well-capitalised with capital adequacy ratios (CARs) that are well ahead of regulatory requirements. On this point, DBS Group ended 2016 with a Common Equity Tier 1 (CET1) CAR of 14.1%, a Tier 1 CAR of 14.7%, and a Total CAR of 16.2%; the requirements by the Monetary Authority of Singapore are 6.5%, 8%, and 10%, respectively.

The bank’s directors also proposed a final dividend of S$0.30 per share, which brings the total dividend for 2016 to $0.60 per share, a level unchanged from 2015.

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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.