Latest Quarterly Performance – 2 Companies That Have Delivered Mixed Result

In the latest earning seasons, we have seen both winners and losers amidst the challenging economic conditions.

Examples of the former are companies such as Genting Singapore PLC (SGX: G13) and Sheng Siong Group Ltd (SGX: OV8).

On the other hand, Keppel Corporation Limited (SGX: BN4) and StarHub Ltd (SGX: CC3) are examples of companies that have recently announced weaker performances.

Yet, there is a third group that are neither one nor the other – the mixed bag. These are companies that cannot be categorised in either of the above two groups. Here are two of them.

1. Parkson Retail Asia (SGX: O9E)

As a quick introduction, Parkson operates departmental stores in Malaysia, Vietnam, Indonesia and Myanmar.

Revenue was up by 17% year-on-year to $109.6 million. But profit attributable to shareholders was down from a loss of $14.9 million to a bigger loss of $43.0 million. EBIDTA for the quarter was positive at $7.5 million, which is a turnaround from a loss of $38.3 million last year.

Overall, revenue grew due to festive buying following the shift in Hari Raya. Nevertheless, quarterly loss increased due to “non-operational impairment on property, plant and equipment of S$21.4 million (FY2016: S$5.4 million), and impairment in goodwill of S$4.3 million (FY2016: Nil).”

As for its outlook, the company said:

“For the 12 months ending 30 June 2018, the Group’s operating environments are expected to remain challenging over fragile consumer sentiment and increased political and societal uncertainties. To mitigate these challenges, the Group will exercise vigilance in pursuing our strategy to transform Parkson into a lifestyle concept retail business.”

2. Health Management International Ltd (SGX: 588) is another company that has reported a mixed performance.

HMI is a healthcare provider with a presence in Singapore, Malaysia and Indonesia. It owns and operates the Mahkota Medical Centre in Malacca and Regency Specialist Hospital in Iskandar Malaysia with total bed capacity of over 500.

HMI also owns and operates HMI Institute of Health Sciences in Singapore, which provides a wide range of healthcare and emergency life-support training services.

Revenue for the quarter was up 9.5% year-on-year, whereas net profit came in 3% higher year-on-year. Nevertheless, the company’s diluted earnings per share (EPS) fell from RM 0.0338 to RM 0.0317 (down 6.2% year-on-year).

Revenue grew as a result of higher patient loads and average bill sizes at the healthcare provider’s two hospitals – Mahkota Medical Centre and Regency Specialist Hospital. Diluted EPS fell by 6.2% despite an increase in net profit due to higher number of shares outstanding in FY2017 as compared to FY2016.

As for outlook, this is what the company said:

“Government initiatives aimed at improving existing medical infrastructure has led to a burgeoning medical tourism sector in Malaysia. Recently, the Malaysia Healthcare Travel Council announced that the medical tourism industry is expected to grow 30.0% yoy to RM1.3 billion in 2017.

In the near term, Airasia is expected to commence direct flights to Guangzhou, Vietnam and Jakarta from Malacca, which may boost medical tourism growth in Malacca. Further developments such as the RM40.0 billion Malacca Gateway project under the Belt and Road initiative and the proposed upgrading of the Malacca International Airport should benefit Mahkota in the mid-term.

Structural growth drivers in the form of an ageing population, rising affluence, increasing prevalence of chronic diseases and an increase in demand for quality healthcare should provide additional tailwinds as the Group positions itself as a leading regional healthcare provider. “

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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.