These 2 Companies Reported Growth In Their Latest Earnings Updates

It’s the earnings season again! 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. Last week, stock exchange operator Singapore Exchange Limited (SGX: S68) released its third quarter earnings update for its fiscal year ending 30 June 2018 (FY2018). The reporting period was from 1 January 2018 to 31 March 2018.

In the quarter, Singapore Exchange experienced a 9.6% year-on-year increase in revenue to S$222.2 million, and a 21.0% jump in profit attributable to shareholders to S$100.5 million. As of 31 March 2018, the company had S$800.0 million in cash on the balance sheet and no debt; the balance sheet had strengthened from a year ago when there was S$739.4 million in cash and no debt. An interim dividend of S$0.05 per share was also declared, unchanged from a year ago,

Singapore Exchange’s chief executive, Loh Boon Chye, shared some comments on the performance in the earnings update:

“We achieved a strong set of results this quarter, with our net profit reaching a new 10-year record high and our revenues hitting their highest levels since we listed in 2000. We actively engaged liquidity providers and focused on outreach to investors, which contributed to increased activity in the securities market. Our marketing efforts, together with longer trading hours enabled by our new derivatives trading and clearing platform, added to an increase in global participation across products and trading sessions.”

On its future, this is what Singapore Exchange had to say:

“With improved global growth, more central banks are seen adopting tightening measures, which will lead to investors rebalancing their portfolios. We expect market activity to improve as investors seek avenues to manage their portfolio risk. Looking forward, we will continue to build on our multi-asset offering and increase our servicing and marketing efforts across our domestic and international client base. We will also strengthen our global network through strategic partnerships and alliances.”

2. Keppel Corporation Limited (SGX: BN4) is another company that released its earnings update last week. For the first quarter of 2018, the company reported a 17.8% year-on-year increase in revenue to S$1.47 billion, and a 33.7% jump in profit attributable to shareholders to S$337.5 million. The company’s growth was driven by strong performances in its Property and Infrastructure divisions.

As a quick background, Keppel Corp is a conglomerate with major business segments that include Offshore and Marine, Property, Infrastructure, and Investment.

In addition to the higher top line and bottom line, Keppel Corp improved its balance sheet; as of 31 March 2018, it had a net debt position of S$5.1 billion, down from S$7.1 billion a year ago. Moreover, the Offshore and Marine segment’s net order book (exclude Sete Brasil orders) grew on both a year-on-year and sequential basis. The net order book ended 2018’s first quarter at S$4.3 billion, up from S$3.5 billion at 2017’s first quarter, and from S$3.9 billion as of 31 December 2017.

On Keppel Corp’s prospects for the rest of the year, the company’s CEO, Loh Chin Hua said:

“Markets have been roiled in recent weeks by concerns over rising trade tensions between the US and China as well as the situation in the Middle East. However, the global economy continues to enjoy broad-based growth, with improved business sentiments in both advanced economies and emerging markets. Strong urbanisation trends continue to present many opportunities for the Keppel Group across our businesses.”

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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. The Motley Fool Singapore has a recommendation on Singapore Exchange.