MENU

3 Things Investors Should Know About 800 Super Holdings Ltd’s FY2018 Earnings

800 Super Holdings Ltd (SGX: 5TG) is a provider of waste management, cleaning and conservancy, and horticultural services to the public and private sectors in Singapore.

Yesterday afternoon, the company announced its financial results for the full year ended 30 June 2018 (FY2018). Let’s look at the highlights of the announcement here.

Show me the money

Revenue for FY2018 came in at S$151.1 million, down 3.7% year-on-year. The fall was largely due to the completion of term contracts and renewal of certain contracts at more competitive prices. Meanwhile, net profit tumbled 46.7% to S$9.1 million. Consequently, earnings per share fell from 9.58 Singapore cents to 5.12 Singapore cents.

Operating cash flow for the year plunged 48.3% to S$15.8 million. The company spent S$56.1 million in capital expenditure in FY2018, compared to S$24.6 million spent last year.

For the fourth quarter, revenue inched down by 1.8% year-on-year to S$37.9 million while the company reversed into a net loss of S$1.7 million. A year ago, it posted S$2.7 million in net profit.

800 Super’s balance sheet weakened for the year. As of 30 June 2018, it had S$5.6 million in cash and cash equivalents, and S$89.1 million in total borrowings. This gives a net debt position of S$83.5 million. In contrast, one year back, it had S$26.9 million in net debt.

Ka-ching!

The company has declared a final dividend of S$0.01 per share for the fourth quarter, down from S$0.03 per share declared last year. 800 Super did not pay any interim dividend for both the years.

What does the future hold?

The environmental services provider said that the industry that it is operating in is “highly competitive”. It competes with its peers based on the range and quality of services provided, timeliness of service delivery, and pricing.

Looking ahead, 800 Super commented that the development of the sludge treatment facility at Tuas South is now undergoing testing and commissioning. The facility has already started to treat sludge from water reclamation plants operated by the Public Utilities Board, and is expected to be fully operational by December this year.

Barring any unforeseen circumstances, the company expects to remain profitable in the next financial period.

The Foolish takeaway

800 Super had a weak FY2018 with lower revenue, net profit and cash flow. Its balance sheet is also more leveraged as compared to a year ago.

As a result of the poor showing, the company’s shares have taken a hit. The shares are currently changing hands at S$0.665 each, down 34% from Monday’s close of S$1 per share. The stock price translates to a price-to-earnings ratio of 13 and a dividend yield of 1.5%.

Worried about the overall state of the market? Do you know the 1 thing you should never do in the stock market? The Motley Fool Singapore’s new e-book lays out a plan to handle market crashes, details the greatest advantage you have as an investor, and looks at decades worth of market data to bring you the smartest insights on investing. You can download the full e-book FREE of charge—Simply click here now to claim your copy

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.