It’s earnings season again. Given many companies reported their results in the past few weeks, I thought it may be useful to summarise the results of two of those companies that delivered growth in their latest results.
SATS Ltd (SGX: S58) is the first company that I will focus on in this article. SATS is a company providing food solutions and gateway services solutions. The Food Solutions covers airline catering, food distribution, industrial catering whereas Gateway Solutions is involved in ground handling services of passengers, flights and cargo.
For the quarter ended 30 June 2018, SATS reported that revenue was up by 3% year-on-year to S$439.4 million. Similarly, operating profit rose by 21.3% to S$64.9 million, driven mainly by higher revenue. As a result, net profit attributable to shareholders for the quarter grew by 11.5% to S$63.9 million.
Free cash flow for the quarter was S$72.3 million, up from S$27.7 million in the same period last year, mainly due to the higher operating cash flow. As a result, SATS ended the quarter with a strong balance sheet of S$439.7 million in cash and short-term deposits and S$106.1 million in debt.
The company also provided the following outlook guidance:
“Despite the threat of global trade uncertainties potentially affecting cargo volumes, we expect passenger volumes in Asia to grow. At the same time, rapid urbanisation in the region will drive demand for safe, high-quality food, and more cruise ships will be deployed in Southeast Asia to keep pace with burgeoning consumer interest. However, pricing pressures will remain.
Our investments in technology and digitalisation are increasing productivity and enhancing our services.
We intend to deepen our collaboration with key customers to support their growth and broaden our unrivalled network of operations across the region.”
Keppel Corporation Limited (SGX: BN4) is another company that announced positive results recently. Keppel is a conglomerate with major business segments that include Offshore and Marine, Property, Infrastructure, and Investment.
For the quarter ended 30 June 2018, Keppel reported that revenue was flat year-on-year at S$1.5 billion. Yet, net profit rose by 44% year-on-year to S$246.2 million. Earnings per share also gained 45% to 13.5 cents. The higher profitability was driven by strong performance in the Property and Infrastructure divisions.
In addition to the higher profitability, Keppel has improved its balance sheet with a net debt position of S$4.9 billion, as at 30 June 2018, down from S$5.5 billion, as at 31 December 2017. As a result, gearing declined to 0.40 times from 0.46 times. Moreover, the Offshore and Marine segment’s net order book (excluding Sete Brasil) grew from S$3.9 billion, as at 31 December 2017, to S$4.6 billion.
Mr Loh Chin Hua, CEO of Keppel Corporation, commented on the latest financial performance:
“Keppel continued to deliver strong results in the first half of 2018. Our multi-business strategy and geographical diversification have enabled the Company to remain resilient, despite cyclical headwinds in some of 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. Motley Fool has a recommendation for SATS Ltd.