We’re near the end of the current earnings season. As is common with every earnings season, there will be some companies posting growth, some posting mixed numbers, and some experiencing declines.
So, which are the businesses that have recently reported lower profits? Let’s look at two of them:
1. Last week, Sarine Technologies Ltd (SGX: U77) released its 2017 third quarter earnings.
As a quick introduction, Sarine Technologies is an Israel-based company that develops, manufactures, and sells precision technology products and systems that are used for the processing of diamonds and other gemstones.
During the reporting quarter, Sarine Technologies’ revenue was down by 34.6% year-on-year to US$11.29 million. The bottom-line was worse, as a profit of US$3.99 million in the third quarter of 2016 became a loss of US$0.53 million. On a positive note, the company maintained a strong balance sheet – as of 30 September 2017, it had US$27.8 million in cash and equivalents, and zero debt.
Lower equipment sales was the main culprit for Sarine Technologies’ lower revenue. There was higher than normal surplus of polished diamond inventory in the mid-stream portion of the diamond industry value chain. Moreover, Sarine Technologies had to deal with illicit competition for equipment sales.
2. Wilmar International Limited (SGX: F34) was another company that reported its 2017 third quarter earnings last week.
The agribusiness giant has three main business segments: Tropical Oils, Oilseeds and Grains, and Sugar.
Wilmar saw its revenue inch up by 0.4% year-on-year to US$11.13 billion during the quarter. But, its net profit fell by 5.7% to US$370.0 million. Core net profit suffered a steeper drop of 15.9% to US$323.7 million. The company enjoyed good performances from its Oilseeds and Grains segment and associates. But, these were offset by declines in the Tropical Oils and Sugar businesses.
As for its outlook, this is what Wilmar said in its earnings release:
“We expect the good performance in the Oilseeds & Grains segment to continue into the fourth quarter, with crush margins and volume anticipated to remain positive. Performance of the other major business segments is expected to be satisfactory.
With good economic performance in key Asian countries, we remain optimistic about the future of Asia. We will continue with our expansion plans, especially in Oilseeds and Grains including Consumer Products.”
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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.