These 2 Companies Recently Reported Weaker Numbers In Their Latest Earnings

We’re nearing the end of the earnings season!

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 financials in their latest results? Let’s look at two of them:

1. Sembcorp Marine Ltd (SGX: S51) reported its 2017 first quarter earnings late April. The company is an oil rig builder and it is majority-owned by the conglomerate Sembcorp Industries Limited (SGX: U96).

The reporting quarter was a tough one for Sembcorp Marine as its revenue fell by 17.2% year-on-year while its profit attributable to shareholders slumped by 28.8%. The company’s balance sheet also weakened compared to a year ago, and its order book declined from end-2016 as well. The softness in the oil & gas industry has affected Sembcorp Marine’s business.

But, the company still sounded an optimistic note about its future in its earnings release. It said:

“Oil prices appear to have stabilised. Global exploration and production spending is expected to increase in 2017, compared to the last 2 years.

Enquiries for non-drilling solutions continue to be encouraging. We are cautiously optimistic of new orders for production facilities in the next few years.”

2. Singapore Exchange Limited(SGX: S68) is the next company on our list. In late April, the company, known as SGX for short, released its fiscal third quarter results.

As a quick introduction, SGX is the only stock exchange in town. The company has three business lines, namely, Equities & Fixed Income, Derivatives, and Market Data & Connectivity.

During the reporting quarter, SGX saw its revenue slip by 1.5% year-on-year. There was a larger decline on of 6.8% in its profit attributable to shareholders, largely because of a one-off loss related to the sale of its stake in the Bombay Stock Exchange. If the one-off loss was stripped away, SGX’s net profit would have been 2% lower than a year ago.

The Derivatives business is the second largest revenue contributor. During the quarter, sales there fell by 9% – it was the only segment that saw a revenue fall.

In SGX’s earnings release, Loh Boon Chye, the chief executive officer, had some comments to share on the stock market operator’s outlook:

“We remain focused on executing our strategy to diversify our business mix across geography and asset classes. Besides looking at ways to improve Singapore’s equities market structure and ecosystem, we will continue to widen and deepen our suite of products and services, to enhance our position as an offshore investment, trading and risk management centre.”

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