2 Companies That Have Recently Announced Growth - DBS and Sheng Siong
It’s earnings season again. 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 will give readers a quick overview of the performances of these companies.
With that, I will focus on two of those companies that delivered growth in their latest results.
Disclaimer: This is not a sponsored post. Opinions expressed in the article by the author should not be taken as investment advice. Please do your own research and due diligence.
1. Sheng Siong Group
Sheng Siong Group Ltd (SGX: OV8) is the first company that I will look at in this article. As a quick introduction, Sheng Siong is one of the largest supermarket chains in Singapore. The company’s network of 54 stores is primarily located at the heartlands of the island. The company was established in 1985 and listed in 2011.
For the first quarter ended 31 March 2019, revenue improved 10.1% year-on-year to S$251.4 million. Similarly, profit improved by 9.6% year-on-year to S$65.5 million.
As a result, net profit grew 6.0% year-on-year to S$19.4 million. Earnings per share (EPS) was also up by 4.9% year-on-year to 1.29 cents.
For the quarter, Sheng Siong generated operating cash flow of S$9.7 million, down from S$14.2 million last year. The lower cash flow was due to unfavourable movements in working capital. Sheng Siong’s balance sheet carried cash and cash equivalents of S$86.3 million with no debt, as of 31 March 2019.
Lim Hock Chee, Sheng Siong’s Chief Executive Officer, provided some guidance on future plans:
“We have successfully bid for three new HDB shops at Bukit Batok Block 292, Anchorvale Road Block 351 and Sumang Lane Block 231 which are expected to be operational by end of June 2019.
Moving ahead, we remain committed to expanding our retail network in Singapore, especially in areas where our potential customers reside. While nurturing the growth of our new stores in Singapore and China remains as one of our priorities, we will also continue with our efforts to enhance our gross margin and improve cost efficiency by changing to a higher sales mix of fresh produce and deriving more efficiency gains in the supply chain.”
Editor’s Note: You may read more on one of the Seedly team members who went down for Sheng Siong Group’s AGM earlier and had shared his experience.
2. DBS Group Holdings
DBS Group Holdings Ltd (SGX: D05) is another company that announced positive results recently.
For the first quarter ended 31 March 2019, DBS reported that total income grew by 6% from a year ago to a record high S$3.6 billion. Net interest income (income from loans) improved by 9% year-on-year to S$2.31 billion, driven by improvement in net interest margin and loan volume growth.
Higher net interest income was partially offset by weaker net fee income, which was down by 2% year-on-year to S$730 million. Net profit also strengthened by 9% to S$1.7 billion due to higher income and lower allowances.
DBS declared a dividend of 30 Singapore cents per share for the quarter. From 2019, the bank has changed its dividend payment frequency to four times per year, instead of the previous two times.
DBS CEO Piyush Gupta said:
“We have had a good start to the year as business momentum was sustained and non-interest income recovered from the recent weakness. The record earnings and ROE progression demonstrate the strengthened profitability of our franchise from digitalisation, a shift towards higher-returns businesses and more nimble execution. We are well placed to continue capturing growth opportunities across the region and delivering healthy shareholder returns.”
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