Earnings season at its tail-end.
Given many companies reported their results in the past few weeks, 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 companies that reported.
With that, we will focus on two of those companies that delivered growth in their latest results.
First Resources Ltd (SGX: EB5) is the first company that has reported a good set of results recently.
As a quick introduction, First Resources is an integrated palm oil producer, managing more than 210,000 hectares of oil palm plantations across the Riau, East Kalimantan, and West Kalimantan provinces of Indonesia.
For the quarter ended 30 September 2018, First Resources’ revenue increased by 24.7% year-on-year to US$171.4 million. Similarly, operating profit was up by 12.9% year-on-year to US$59.9 million, driven mainly by higher sales. As a result, profit attributable to owners improved 22.2% year-on-year to US$39.0 million.
The company’s solid performance was supported by higher fresh fruit bunches (FFB) yield which came it at 5.1 tonnes/hectare for the reporting quarter, up from 4.8 tonnes/hectare a year ago. To be sure, the company’s net debt increased from US$217.4 million as of 31 December 2017 to US$263.2 million as of 30 September 2018, leading to net gearing ratio (calculated as net debt over total equity) rising from 0.21 to 0.28 over the same period.
First Resources provided the following outlook guidance:
“Palm oil prices had been weak in 3Q2018 and are expected to remain volatile in response to macro developments such as the US-China trade tensions as well as changes to the import and export tax structures in consuming and producing countries.
On the biofuel front, demand for palm oil is expected to be supported by the extension of Indonesia’s biodiesel policy together with the favourable spread between gasoil and palm oil prices, which has resulted in palm-based biodiesel becoming more economically viable.”
Jardine Cycle & Carriage Ltd (SGX: C07) or Jardine C&C is another company that announced a positive result recently.
As a quick introduction, Jardine C&C is a conglomerate with a diverse set of businesses, with segments such as automotive, financial services, heavy equipment and mining, agribusiness, information technology, and others. These businesses are grouped into three areas, namely Astra International, Direct Motors, and Others.
For the quarter ended 30 September 2018, Jardine C&C that revenue was up by 10% year-on-year to US$4.8 billion while operating profit grew by 26% year-on-year to US$563.2 million. Similarly, net grew by 15% year-on-year to US$542.6 million. The positive performance was driven by better performance in both Astra International and Direct Motor business. The Group’s consolidated net debt, excluding Astra’s financial services subsidiaries, was US$1.2 billion at the end of September 2018, compared to US$819 million at the end of December 2017.
For the quarter, Ben Keswick, the chairman of the group, commented:
“We expect the Group to achieve satisfactory full year results, notwithstanding concerns over competitive pressure in the car market and weak crude palm oil prices in Indonesia. The Group’s Direct Motor Interests and Other Strategic Interests are expected to continue to perform well.”
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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.