Friday, October 28, 2011

Q3 earnings hit a comfortable $1.3b

Business Times: Thu, Oct 27
HALFWAY through the reporting season, 33 listed companies have reported a comfortable $1.335 billion in third-quarter earnings.


However, quarterly net profits for the 32 companies with comparisons slipped 11.6 per cent from a year ago to $1.322 billion.


Still, the mid-season scorecard shows 29 companies firmly in the black. Of these, 20 emerged with stronger profits than in the year-ago period.


Just four companies suffered losses. Both Asia- themed fund United International Securities and electronics manufacturer Aztech Group were newly in the red, alongside Top Global and Texchem-Pack Holdings.


For the nine-month period, the 33 firms took home total net profits worth $4.369 billion.


Excluding Sabana Reit, which listed only in November last year, the remaining 32 companies reported profits that were 5.4 per cent higher at $4.321 billion.


Heading the list of third- quarter earners were the likes of Keppel Corporation and real estate plays such as CapitaLand, Keppel Land and CapitaMall Trust.


At the top of the pack was diversified conglomerate Keppel Corporation. It beat street estimates with third-quarter takings of $406.1 million, one-third higher than what it bagged last year.


The property sector also packed a punch during the quarter, with seven of the 10 top earners being developers or real estate investment trusts (Reits) like CapitaLand, Keppel Land and CapitaMall Trust.


Keppel Corp's earnings were led by its offshore and marine division.


Analysts were largely buoyed by Keppel Corp's offshore-led performance and expect the company to remain on the growth path despite global macroeconomic uncertainty.


'Despite the uncertainty in the financial markets, fundamentals in the oil and gas industry remain sound due to favourable demand and supply dynamics,' said OCBC Research.


The group's separately listed property arm, Keppel Land, also reported the sixth highest profit among the 33 companies, bagging $58 million during the third quarter, a 6.6 per cent year-on-year rise from $54.4 million.


Real estate investment trusts tend to fare better than property developers.


CapitaLand's Q3 profit plummeted 82.6 per cent to $80.2 million from a restated $460.1 million, largely due to an accounting change.


Quarterly profits at CapitaMalls Asia, too, fell 30 per cent y-o-y to $36.5 million, from $52.4 million.


One of the most improved results came from the Reits sector: Ascott Reit doubled its profit to $25.3 million, from $12 million a year ago.


Double-digit rises also figure among other real estate trusts.


Commercial Reits Suntec Reit and K-Reit Asia reported 21.9 per cent and 17.7 per cent bottomline gains, respectively, to $56.4 million and $26.7 million.


Among the telecommunications firms, only M1 has released its financial results. The company underperformed expectations, even as its Q3 net profit rose 4.1 per cent to $41.1 million.


Despite that, analysts are betting on its earnings resilience and high dividend payout to be a good defence against the volatility that has mauled the market.


M1 rivals StarHub and SingTel will release their results on Nov 9 and Nov 10, respectively.


Team Marshe
Martin Koh/ Sherry Tang
9383-3992/ 9844-4400
www.marshe.net

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