Many companies have reported their results over the past few weeks — some of them have had good news to share, some bad, and some a little of both. Today, we’re looking at two companies that have recently reported mixed results. First up is United Overseas Bank Ltd (SGX: U11), one of the three main local banks listed in Singapore, along with DBS Group Holdings Ltd and Oversea-Chinese Banking Corp Limited. For the quarter ended 31 December 2018, UOB reported that total income fell by 1% from a year ago to S$2.2 billion. Net interest income (income from loans) grew 10% year…
Many companies have reported their results over the past few weeks — some of them have had good news to share, some bad, and some a little of both. Today, we’re looking at two companies that have recently reported mixed results.
First up is United Overseas Bank Ltd (SGX: U11), one of the three main local banks listed in Singapore, along with DBS Group Holdings Ltd and Oversea-Chinese Banking Corp Limited.
For the quarter ended 31 December 2018, UOB reported that total income fell by 1% from a year ago to S$2.2 billion. Net interest income (income from loans) grew 10% year on year to S$1.6 billion, driven by improvement in net interest margin and loan volume growth. Yet, net fee income was down by 8% year on year to S$467 million, mainly due to lower wealth management and loan-related fees. Lower total income was offset by a decline in expenses and loan allowances, resulting in a 7% year-on-year increase in net profit to S$0.9 billion.
The board proposed a final dividend per share of S$0.50 and a special dividend of S$0.20. Including the interim dividend per share of S$0.50 paid, the total dividend per share would be S$1.20 for 2018, an increase of 20% over last year.
Wee Ee Cheong, UOB’s deputy chairman and chief executive officer, commented on the bank’s outlook:
“As global uncertainties persist in 2019, we will stay disciplined in pursuing sustainable growth, while maintaining a risk-focused approach and equipping our people for the future. As a long-term player with deep knowledge of and an extensive presence that connects Southeast Asia, we are best positioned to ride on the region’s immense growth potential.
For our customers across the region, we will continue to invest in our omni-channel capabilities and to forge ecosystem partnerships, such as our recent ones with Prudential and Grab, in providing innovative and relevant solutions. Starting in Thailand, we will also deepen engagement with ASEAN’s massive base of ‘mobile first’ and ‘mobile only’ customers through our Digital Bank.”
The next company to consider is Sembcorp Industries Limited (SGX: U96), a conglomerate with three major business segments: utilities, marine, and urban development and others. The Marine segment’s contribution mainly comes from SembCorp Industries’ 61% ownership stake in SembCorp Marine Ltd (SGX: S51).
For the quarter ended 31 December 2018, Sembcorp Industries’ revenue improved by 7% year on year to S$2.6 billion. Yet, profit from operations for the quarter declined by 25% year on year to S$219 million, driven mainly by weaker performance in the marine segment. Consequently, net profit for the quarter fell 10% year on year to S$106 million.
Sembcorp Industries recommended a final dividend of S$0.02 per ordinary share. Together with an interim dividend of S$0.02 per ordinary share paid in August 2018, the total dividend for the year would be S$0.04 per ordinary share.
Here’s a brief comment by Sembcorp Industries on its outlook:
“The market environment is expected to be challenging in 2019, especially for the offshore and marine sector which remains in a prolonged downcycle. Global economic growth is projected to ease as markets face escalating risks including rising trade tensions and tightening financial conditions.
In this context, the Group remains focused on executing strategy, improving performance and strengthening its balance sheet.”
Click here now for your FREE subscription to Take Stock Singapore, The Motley Fool’s free investing newsletter. Written by David Kuo, Take Stock Singapore tells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.
The Motley Fool’s purpose is to help the world invest, better. Like us on Facebook to keep up-to-date with our latest news and articles.
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. The Motley Fool Singapore recommends DBS Group Ltd, United Overseas Bank Ltd, and Oversea-Chinese Banking Corp Limited.