We are now in the busiest part of the earnings season. Given that many companies are reporting their results at the same time, it might be useful to categorise them into three buckets of positive, negative and mixed. In this article, we will look at two companies that have recently reported mixed results.
StarHub Ltd (SGX: CC3) is the first company that we will look at in this article. As a quick introduction, StarHub is one of the three Singapore companies in the telecommunications industry, behind Singapore Telecommunications Limited (SGX: Z74) and ahead of M1 Ltd (SGX: B2F).
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In its latest quarterly earnings update, Starhub reported that revenue was up 6% year-on-year to S$597 million while service revenue declined 1% year-on-year to S$444 million. Quarterly earnings before interest tax depreciation and amortisation (EBITDA) improved 5% year-on-year to S$162 million. Yet, profit attributable to investors fell by 14% year-on-year to S$54.0 million. The weaker profitability was mainly due to lower revenue for the Mobile and Pay TV segments, as well as higher operational costs in the cybersecurity operations.
As at 31 March 2019, net debt stood at S$857 million and its debt-to-EBITDA ratio stood at 1.49. Starhub declared a dividend per share of 2.25 cents in the quarter.
Mr Peter Kaliaropoulos (Peter K), CEO of StarHub, commented:
“Despite increased competitive intensity, we delivered significant growth in post-paid mobile subscribers to 1.44 million and highest number of residential broadband customers to 495,000 customers – the highest growth in the last five quarters. Our Pay TV net reduction in customers remained steady to 15,000 and at the end of Q1 we have 394,000 Pay TV customers.
Whilst we are pursuing our fair market share, we are also addressing our operating cost structure for our core mobile and data connectivity businesses. Overall, our service EBITDA margin increased to 33.7% YoY. However, as cyber security operations require considerable resources to deliver growth, the higher operational expenditure from Ensign coupled with decline in revenues for Mobile and Pay TV services and higher depreciation, resulted in NPAT at $49 million, a 23% decline YoY. Excluding the impact of cyber security services, NPAT would be $61 million for Q1,”
Singapore O&G Ltd. (SGX: 41X) is the other company that we will look at. As a quick introduction, Singapore O&G is a healthcare company that operates mainly in four segments: Obstetrics and Gynaecology, Cancer-related, Paediatric, and Dermatology.
In its latest earnings update, Singapore O&G reported that revenue was up by 6.5% year-on-year to S$8.7 million. Yet, profit from operations fell 14.4% year-on-year to S$2.5 million, driven mainly by higher expenses. As a result, net profit declined by 15.5% year-on-year to S$2.1 million. As of 31 March 2019, Singapore O&G’s cash and cash equivalents stood at S$25.1 million with zero debt. This was up from S$21.5 million in cash and cash equivalent and no debt as of 31 December 2018.
Dr. Beh Suan Tiong, Executive Chairman of the company, commented:
“The Group kicked off financial year 2019 with commendable revenue growth for our O&G, Cancer-related and Paediatrics segments. Our Paediatrics segment continued to register steady growth with increased referrals from our O&G segment and during the quarter, we continued to strengthen this segment with the addition of our fourth paediatrician, Dr. Petrina Wong, thus positioning us well for further growth.
As we continue to see growing demand for our O&G services, we recruited our seventh O&G medical specialist, Dr. Clara Ong in May this year. Dr. Ong comes with more than 10 years of experience in the O&G practice and we look forward to her contribution to the Group. At the same time, the Group is also looking to sharpen the competitive edge of our Dermatology segment to further boost this segment.”
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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. The Motley Fool Singapore has recommended the shares of Singapore O&G.