It’s earnings season again! Given that a number of companies have reported their results, I thought it may be useful to summarise the results of some of these companies in three different buckets – positive, negative, mixed. This categorisation will give our readers a quick overview of the performances of these companies. With that, we will focus on two of those companies that delivered growth in their latest results. Singapore Exchange Limited (SGX: S68) is the first company that we will look at in this article. As a quick background, Singapore Exchange Limited or SGX for short is the only stock…
It’s earnings season again!
Given that a number of companies have reported their results, I thought it may be useful to summarise the results of some of these companies in three different buckets – positive, negative, mixed. This categorisation will give our readers a quick overview of the performances of these companies.
With that, we will focus on two of those companies that delivered growth in their latest results.
Singapore Exchange Limited (SGX: S68) is the first company that we will look at in this article.
As a quick background, Singapore Exchange Limited or SGX for short is the only stock exchange in Singapore. The company has three business lines, namely Equities & Fixed Income, Derivatives, and Market Data & Connectivity.
For the quarter ended September 2018, Singapore Exchange’s revenue grew by 2% to S$208.9 million. Operating profit was up by S$0.4 million to S$106.4million. Similarly, net profit attributable to shareholders improved by 1% to S$91.7 million. Singapore Exchange’s diluted earnings per share remained unchanged at 8.5 cents.
An interim dividend of S$0.075 per share was declared, 50% higher than S$0.05 per share dished out a year ago. Loh Boon Chye, chief executive of Singapore Exchange, commented on the latest results:
“Our first-quarter performance demonstrates the diversity and resilience of our multi-asset business. We achieved strong record revenues in our derivatives business, while our securities market saw a pullback along with other regional stock markets, amid heightened volatility and emerging market weakness. During the quarter, we made strategic investments in companies that will enable us to expand our fixed income business and pursue the development of our digital marketplace for freight.”
Top Glove (SGX: BVA) is another company that announced a positive result recently.
As a quick introduction, Top Glove is the largest rubber gloves maker in the world with about a 25% market share. The company is based in Malaysia. Up to its recent debut in Singapore stock exchange, it has listed on the KLSE Malaysia as Top Glove Corporation Bhd (KLSE: TOPGLOV).
For the quarter ended September 2018, Top Glove’s revenue was up 34.9% year-on-year to RM1.2 billion. Similarly, operating profit for the quarter was up 58.8% year-on-year to RM161.0 million. Net profit attributable to shareholders for the reporting quarter was up by 7.5% year-on-year to RM 101.6 million. The lower growth in net profit (as compared to revenue) was due to higher finance cost and higher taxes during the reporting quarter. As of 31 August 2018, Top Glove’s borrowings stood at RM2.2 billion while its cash and bank balances stood at RM164.2 million, giving it a net debt position of RM 2.0 billion.
In its earnings release, Top Glove provided the following outlook:
“To ensure it is well-positioned to meet the robust global demand for gloves and achieve its ambitious Fortune Global 500 dream, Top Glove will continue to pursue strategic expansion. In progress is the expansion of several existing facilities: F32 (Phases 1 & 2 to be completed early and end 2019 respectively), F33 (to be completed early 2019) and F5A (to be completed end 2019). Meanwhile, its newest factory F8A in Thailand, is scheduled to be operational early 2020. These will boost the Group’s total number of production lines by an additional 98 lines and production capacity by 9.8 billion gloves per annum. By 2020, Top Glove is projected to have 746 production lines and a production capacity of 69.1 billion gloves per annum. Top Glove is also looking to expand its operations to Vietnam and has entered into an agreement to acquire a piece of land for a factory which is expected to commence operations within the next 2 years.
In support of its ambitious growth agenda, Top Glove will also continue to explore inorganic expansion via mergers and acquisitions, as well as new set-ups in related industries in order to grow faster and more efficiently.”
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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 Singapore Exchange Limited and Top Glove.