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Earnings Brief: Singapore Airlines Ltd, Singapore Technologies Engineering Ltd and CapitaLand Limited

Three blue-chip companies released their latest financial results either yesterday evening or this morning. Here are some quick highlights from the earnings announcements:

1. Singapore Airlines Ltd (SGX: C6L)

a) For the first half ended 30 September 2017, revenue rose $5.5% year-on-year to $7.71 billion due to improvements seen in all its business segments. Passenger flown turnover increased due to higher traffic, partially offset by the reduction in passenger yield. Cargo revenue was higher year-on-year due to increased freight carriage and yield. Engineering services saw a revenue improvement largely due to line maintenance, and aircraft and component overhaul activities.

b) Net profit surged 32% to $425 million on the back of higher operating profit and a lower share of losses from associated companies. The lower share was due to the absence of last year’s gain on SIA Engineering Company Ltd’s (SGX: S59) divestment of its 10% stake in Hong Kong Aero Engine Services Ltd (HAESL) and special dividends received from HAESL.

c) Singapore Airlines will be paying an interim dividend of 10.0 Singapore cents per share, up from 9.0 cents per share dished out a year ago.

d) As for the outlook, the airline said that pressure remains as competitors mount significant capacity in key markets and yields continue to be strained, despite some stabilisation in recent months. It added: “The Group’s three-year transformation programme is progressing on track, with the first wave of initiatives, each with detailed action plans, underway. The Group is identifying new opportunities for revenue generation, re-structuring of its cost base and enhancement of organisational effectiveness under the programme”.

2. Singapore Technologies Engineering Ltd (SGX: S63)

a) For the nine months ended 30 September 2017, revenue grew 1.1% year-on-year to S$4.92 billion. Revenue for the Aerospace sector was flat at S$1.80 billion while revenue for the Electronics sector increased 20% to S$1.64 billion. Revenue for the Land Systems and Marine sectors fell 6% and 25% respectively.

b) Profit before tax grew 10.4% to S$449.7 million.

b) Net profit rose 9.3% to S$343.4 million.

c) The engineering group said that barring unforeseen circumstances, it foresees revenue and profit before tax for the financial year 2017 (FY2017) to be comparable to that of FY2016.

3. CapitaLand Limited (SGX: C31)

a) For the nine months ended 30 September 2017, revenue slipped slightly by 0.1% to S$3.4 billion. The dip was due to lower contribution from development projects in Singapore, which was mitigated by higher contribution from development projects in China, rental contribution from newly acquired and opened properties, and consolidation of revenue from Capitaland Mall Trust (SGX: C38U), CapitaRetail China Trust (SGX: AU8U) and RCS Trust (RCST).

b) Singapore accounted for 37% of the group’s revenue while China’s operations accounted for 41.2%. Together, the two core markets contributed to 78.2% of revenue.

c) Profit from operations, however, ballooned 70.2% to S$1.76 billion.

d) The share of results of associates and joint ventures, net of tax, grew 25.7% to S$644.6 million.

e) Net profit rose 68.9% to S$1.28 billion. The increase was due to improved operating performance, higher fair value gains from revaluation of investment properties and portfolio gains, which was partially offset by the absence of a fair value gain from the change in use of Raffles City Changning Tower 2.

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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 units of Capitaland Mall Trust. Motley Fool Singapore contributor Sudhan P owns units of Capitaland Mall Trust.