It’s getting towards the end of the earnings season. Given that most companies have already reported their latest financial results, it might be useful to categorise them into three buckets of positive, negative and mixed.
In this article, we will look at two companies that have recently reported mixed results.
Thai Beverage Public Company Limited (SGX: Y92) is the first company to be featured in this article.
As a quick introduction, Thai Beverage is a company operating in four different segments, namely, Spirits, Beer, Food, and Non-Alcoholic Beverages.
In its second quarter, Thai Beverage announced that revenue was up 34.3% year-on-year to THB 67.6 billion. Spirits, Beer and Food segments saw their revenues grow year-on-year by 14.3%, 74.4% and 107.7%% respectively in the reporting quarter. EBITDA (earnings before interest, tax, depreciation and amortisation) grew by 28.2% to THB 11.9 billion. Overall, the Spirit and Food segments performed well in the quarter with higher profitability, offset by the weaker performance in the Beer and Non-Alcoholic Beverages segments.
However, net profit attributable to shareholders declined 3.2% year-on-year to THB 6.3 billion, driven by weaker profitability in the Beer and Non-Alcoholic Beverages segments. Moreover, Thai Beverage’s balance sheet deteriorated in the past few quarters, with net debt of THB 214.1 billion as of 31 March 2018, up from the THB 30.7 billion recorded on 30 September 2017.
JUMBO Group Ltd (SGX: 42R) is the next company that has reported mixed performances recently.
As a quick introduction, JUMBO is a restaurant operator that is perhaps most famous for the chili crab served in its JUMBO Seafood chain of restaurants.
For the second quarter ended 31 March 2018, Jumbo’s revenue improved by 6.0% year-on-year to S$41.7 million. The growth in revenue was driven by operations in Singapore and China. Similarly, gross profit for the quarter increased by 5.0% to S$26.4 million compared to a year ago, driven mainly by the aforementioned revenue growth.
Yet, net profit for the quarter fell by 26.2% year-on-year to S$4.2 million. The decline in net profit was driven by higher operating expenses as a result of an increase in the number of outlets and expansion of corporate offices in Singapore and China.
Ang Kiam Meng, Group CEO and Executive Director of JUMBO, commented:
“Revenue from our Singapore and PRC operations have grown steadily. This underscores the success of our business expansion strategy and the appeal of the JUMBO Seafood brand among consumers within our core markets.
While the higher expenses associated with the opening of new outlets as well as the performance of new outlets during their initial gestation period were reflected in our Q2 FY2018 results, we believe that these are the necessary short-term costs to support our expansion and JUMBO’s long-term growth story remains intact in view of the rising consumerism in the PRC.”
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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.