Given that many companies reported their earnings results at the same time in the past few weeks, it might be useful to categorise them into three buckets of positive, negative and mixed. In this article, let’s look at two companies that have recently reported mixed results.
Telco, StarHub Ltd (SGX: CC3), is the first company that we will look at in this article.
In the latest quarterly earnings update, revenue grew 5.4% year-on-year to S$597.3 million. Service revenue was up 0.7% to S$466.8 million. Yet, EBITDA (earnings before interest tax depreciation and amortisation) declined 10.4% to S$155.3 million. Similarly, profit attributable to investors was down 22.8% year-on-year to S$61.7 million. The lower profitability was due to weak performance in the Mobile and Pay TV segments.
As at 30 June 2018, net debt stood at S$733.9 million and debt-to-EBITDA ratio was 1.19. StarHub proposed dividend per share of four cents in the quarter.
Peter Kaliaropoulos, CEO of StarHub, commented:
“Revenue growth from the Enterprise segment was driven by customer acquisitions, growth in data usage and fixed services, and higher demand for managed services and cyber security solutions.
The increasingly competitive environment for consumer services and combination of OTT services, continue to impact revenue from services such as Mobile and Pay TV.
Winning our fair share of the market for connectivity services, improving and delivering consistent customer experience across all customer segments, leveraging our data analytics capabilities, and delivering innovative solutions predominantly in managed services such as cyber security and robotics are important to our growth.”
Singapore Technologies Engineering Ltd (SGX: S63), or STE, is the second company that we will look at in this article. As a quick introduction, STE is a conglomerate with business interests in various sectors, namely, Aerospace, Electronics, Land Systems, Marine and others.
For the quarter ended 30 June 2018, STE reported that revenue declined by 3.3% year-on-year to S$1.7 billion. Yet, profit attributable to shareholders for the quarter grew by 10.0% to S$117.5 million. Similarly, earnings per share (EPS) was up 9.3% year-on-year to 3.75 cents. The growth in profit was achieved in all four segments.
The engineering conglomerate’s order book stood at S$13.4 billion at the end of the quarter, flat compared to 31 December 2017. STE expects S$2.7 billion of its order book to be delivered in 2018. As of 30 June 2018, the conglomerate’s total debt stood at S$1.02 billion while its cash and investments stood at S$1.21 billion, giving it a net cash position of S$0.19 billion.
STE’s president and CEO, Vincent Chong, said:
“Our Aerospace and Electronics sectors delivered strong 2Q2018 earnings. Our order book remained robust at $13.4b, contributed by new orders including those in the Smart City spaces. On the whole, we are tracking well on our strategy of strengthening our core as well as actively pursuing growth opportunities in defence exports and Smart City projects.”
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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.