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These 2 Companies Recently Reported Growth In Their Latest Earnings

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

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

1. Straco Corporation Ltd (SGX: S85) reported its 2017 first quarter earnings two weeks ago.

As a quick background, the company owns and runs tourism assets in China and Singapore. In China, the company has the Shanghai Ocean Aquarium, Underwater World Xiamen, and Lintong Lixing Cable Car attractions. In Singapore, Straco is the majority owner of the Singapore Flyer, one of the largest observation wheels in the world.

During its reporting quarter, Straco saw its revenue grow 4.2% year-on-year. This led to a 6.9% increase in profit attributable to shareholders. Straco also ended the quarter with a strong balance sheet that had S$167.9 million in cash and equivalents and just S$58.9 million in borrowings.

Straco attributed its revenue growth to higher visitor numbers for its three China attractions and better yield at the Singapore Flyer. In particular, the Shanghai Ocean Aquarium experienced “double-digit growth in visitor numbers” while the Underwater World Xiamen saw a 9.3% increase in visitors.

Commenting on its market conditions, Straco said that domestic tourism in China is expected to grow 10% in 2017, according to the China National Tourism Administration. Meanwhile, the Singapore Tourism Board projects the number of visitor arrivals in Singapore to increase by between 0% and 20% this year.

2. Oversea-Chinese Banking Corp Limited (SGX: O39), Singapore’s oldest bank, also reported its 2017 first quarter results two weeks ago. The bank grew its total income by 9% year-on-year during the quarter while its profit increased by 14%. More importantly, the bank’s book value per share also stepped up by 5.7% from a year ago.

In OCBC’s earnings release, its chief executive officer, Samuel Tsien, gave a good summary of the bank’s quarter and its future plans:

“We are pleased to report a rise in first quarter earnings. Our results reflect the underlying strength and diversity of our banking, wealth management and insurance franchise.

We achieved broad-based loan growth, grew our private banking AUM, and reported significantly higher fee income. Our Hong Kong, Malaysian and Indonesian banking subsidiaries saw higher year-on-year earnings growth in local currency terms and Great Eastern continued to deliver robust underlying total weighted new sales and new business embedded value growth.

The overall quality of the loan portfolio remained stable. Although the stress in the oil & gas support services sector is continuing, sufficient provisions have been made. We have a strong capital and liquidity position, and launched our maiden Covered Bond Programme which further diversified our funding base.

While we see some sectorial strength in the domestic economy, this is not yet broad-based, and we remain watchful to the persistent headwinds in the operating environment. Our core businesses are resilient, we remain prudent and focused on our strategic priorities, and are well-placed to capture opportunities as they arise.”

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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.