We are now in the busiest part of earnings season. Many companies have reported their results in the past few weeks — some of them have had good news to share, some bad, and some a bit of both.
Today we’re having a look at two companies that have recently reported mixed results.
Singapore Telecommunications Limited (SGX: Z74) is first on the list and needs little introduction. It’s the major local telecom player in Singapore. The other two are StarHub Ltd and M1 Ltd.
In the latest quarter ended 31 March 2019, SingTel reported that revenue was up by 1.9% year on year at S$4.3 billion. Yet, earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the quarter fell 5.2% year on year to S$1.2 billion. Also, the group share of associates’ pre-tax earnings declined by 19.3% year on year to S$419 million. Though net profit was up by 0.4% year on year to S$773 million, excluding exceptional items, underlying net profit declined 15.0% year on year to S$697 million. The lower underlying net profit was due to weaker performance in the group’s Enterprise business, as well as lower share of associates’ earnings.
Chua Sock Koong, SingTel’s group CEO, commented on the challenges faced by its associates:
“Intense competition has affected the markets in India and Indonesia this past year. Airtel is strengthening its balance sheet with capital raising now in progress, and has also announced an intended IPO for Airtel Africa. We continue to be optimistic about the growth potential of our associates’ markets, with the rate of data usage growth and the plethora of digital content and services available and carried over the mobile networks. As a Group, we are committed to deliver a superior digital experience for our more than 650 million customers across the region. Our associates will continue to lead with the best network in their markets.”
Next on the list is Sembcorp Industries Limited (SGX: U96), a conglomerate with three major business segments: Utilities, Marine, and Urban Development & 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 March 2019, Sembcorp Industries’ revenue fell 10% year on year to S$2.5 billion. Yet, profit from operations for the quarter improved by 4% year on year to S$223 million, driven mainly by stronger performance in the Energy segment. Similarly, net profit for the quarter was up by 21% year on year to S$93 million.
In the reporting quarter, operating cash flow was S$332 million, up from S$191.0 million seen in the corresponding quarter last year. The improvement was mainly driven by higher profit and better working capital management.
Here’s a brief comment by Neil McGregor, group president & CEO of Sembcorp Industries:
“In 1Q2019, our Energy business continued to perform well with improved contributions from India and the UK. We also grew our energy portfolio, with the completion of the 427-megawatt Sirajganj Unit 4 power plant in Bangladesh in April 2019. We now have a global energy portfolio of over 12,400 megawatts, with 11,800 megawatts in operation and 650 megawatts of renewables under development.
Orderbook for the Urban business remains healthy while the Marine business faces a challenging market environment. The Group continues to make progress on the execution of our strategy and capital recycling plans.”
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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.