These 2 Companies Delivered Growth In Their Latest Quarterly Earnings Updates

The earnings season had recently come to an end. As is common with every earnings season, there will be some companies posting growth, some posting mixed numbers, and some experiencing declines. Let’s take a look at two companies that delivered growth recently:

1. In early March, Jardine Matheson Holdings Limited (SGX: J36) released its 2017 second half and full year earnings update.

As a quick introduction, Jardine Matheson is a sprawling conglomerate with interests in many Singapore-listed companies such as automobile distributor Jardine Cycle & Carriage Ltd (SGX: C07), bricks-and-mortar retailer Dairy Farm International Holdings Ltd (SGX: D01)hotelier Mandarin Oriental Limited (SGX: M04), and more.

But that’s not at all. Jardine Matheson also has stakes in the London-listed insurer Jardine Lloyd Thompson, the privately-held mini-conglomerate Jardine Pacific and motor services group, Jardine Motors.

In 2017, Jardine Matheson’s revenue increased by 6% to US$39.46 billion. Its underlying profit attributable to shareholders did even better, as it improved by 13% to US$1.57 billion. As a result, Jardine Matheson’s underlying earnings per share (EPS) was up by 12% to US$4.17.

Jardine Matheson had decided to share the spoils with investors, as it raised its full-year dividend for 2017 by 7% to US$1.60 per share.

On a segmental basis, Jardine Pacific, Jardine Motors, Jardine Lloyd Thompson, Hong Kong Land, and Astra reported growth in underlying profit in 2017. On the other hand, Dairy Farm, Mandarin Oriental and Jardine Cycle and Carriage (exclude Astra) saw their underlying profit fall.

In Jardine Matheson’s earnings update, its chairman, Sir Henry Keswick, shared the following comments on the conglomerate’s outlook:

“The Group’s principal markets across Greater China and Southeast Asia remained strong during 2017, and appear well set for 2018. This, coupled with development initiatives being pursued by our businesses, provides the Group with a firm foundation for long-term growth.”

2. Best World International Limited (SGX: CGN) is next in line. The company reported its 2017 fourth quarter and full year earnings update in late February.

During the reporting quarter, Best World saw its revenue climb by 19.8% year-on-year to S$74.07 million, mainly due to sales growth in China. Profit attributable to shareholders did even better, climbing by 77.2% to S$21.80 million, due largely to a 24.5% decline in distribution expenses, and an income tax credit of S$1.51 million (the fourth quarter of 2016 had an income tax expense of S$6.19 million).

As of 31 December 2017, Best World’s total debt stood at S$7.4 million while its cash and bank balances was at S$82.2 million. This gives the company a net cash position of S$74.5 million. The company also recommended a final dividend of 2.6 cents per share, which brought its total dividend for 2017 to 4.1 cents.

As a quick introduction, Best World is a direct-selling company that deals with a wide range of healthcare products. It sells its products to customers and members in 12 markets, and operates in three segments, namely, Direct Selling, Export, and Manufacturing/Wholesale.

Huang Ban Chin, Best World’s executive director and chief operating officer, gave the following comments on the company’s prospects in the latest earnings update:

“Despite the prevailing macroeconomic headwinds, we are pleased to deliver yet another strong set of results for FY2017. Our endeavours in the China market continue to pay off with growth momentum sustaining throughout the period.

Moving forward, we have several initiatives being lined up; such as the change in business model from Export Segment to Direct Selling and the expansion of our direct selling coverage in China. With a result oriented and motivated team, we believe that this is the beginning of a new growth era for us.”

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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 contributor Lawrence Nga doesn’t own shares in any companies mentioned. The Motley Fool Singapore has a recommendation on Dairy Farm.