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8/2/2019 Sharing Wisdom (3rd March 2012)
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SharingWisdom(3rdMarch2012)
PoorQ4resultssparkcautiousoutlook
1stMarch2012
ByKennethLim
TheBusinessTimes
©2012SingaporePressHoldingsLimited
Totalprofitsof301firmsdownmorethan20%forOct-Decquarter
ANOTHERtoughquarter,andmoretocome,analystssay.
Corporate profits generally
disappointed in the fourth quarter of
2011, and companies are painting a
cautious outlook for the months
ahead,analystssaid.
'I see more disappointments than
upside surprises,' said Maybank Kim
EngheadofresearchStephanieWong.
'Actually it's quite a lot of
disappointment.Generallyitreflectsa
verytoughfourthquarterlastyearas
someoftherealitystartedtokickin.'
Atotalof303companiespostedtheir
2011fourth-quarterresultsasat5.30
pmyesterday.Ofthis,301companies
whose fourth quarter 2010 results
wereavailableforcomparisonshowed
a 23.7 per cent year-on-year fall in
totalprofitsto$10.3billion,according
todatacompiledbyBT.
Totalfourth-quarterprofitforthe303
companieswas$10.4billion,with242
companies in the black and 61
reportinglosses.Companiesthatdidworseoutnumberedthosethatdidbetter186to
115.
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SharingWisdom(3rdMarch2012)
Forthefullyear,totalprofitin2011was$34.7billionfrom393companies.Ofthe387
with comparable results, earnings fell 4.5 per cent to $34.25 billion from 2010,
reflecting a much weaker second half of the year.Worse performers outnumbered
betterperformers216to171.
UOB-KayHianresearchheadAndrewChowsaidperformancewasuneven,withcertain
sectorsdoingbetterthanothers.
'Ithinkit'sbeenquitesectorspecific,'MrChowsaid.
Headdedthat fourth-quarter resultswere actuallymostly in line,but thatwas only
afteraggressivedowngradesovertheyear,especiallyinthesecondhalfof2011.
DMG&PartnersanalystLengSengChoonsaidthebankingsectorwasamixedbag.DBS
GroupHoldings,whichbenefitedfromlower-than-expectedtaxes,andOversea-Chinese
Banking Corp, which saw better trading income, beat consensus estimates, while
UnitedOverseasBankmissedpredictionsbecauseofhigherprovisions.
Loansgrowthwasakeyconcerninthefourthquarter,andsluggishnessisexpectedin
2012.
'I'mlookingatearningscontractionforallthreebanksin2012,'MrLengsaid.
Commodities-related names had a tough end to the year amid extremely volatilematerialsprices.
'Fourth-quarterwasgenerallyweakbutinlinewithexpectations,'saidKimEnganalyst
JamesKoh.
Wilmar International was highlighted by a number of analysts as a notable
disappointment,asmarginstookahitandcoreincomemissedestimates.
Theoutlookforthesectorremainsmuted.
'Commoditypriceshaveseensomekindofstabilisationsincethestartoftheyear,'Mr
Kohsaid.
Property developers also saw a slowdown, although sales in Singapore beat
expectations.
'Forcompaniesthatarediversifiedintoothercountriesandregions,youcanseethat
theearningsactuallycamedowninthelastquarteroratleastlasthalfof2011,'said
AmFraseranalystLauWeiChong.
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SharingWisdom(3rdMarch2012)
CapitaLandandKeppelLandbothfacedheadwindsinChina,whichcouldpersistinto
2012,MrLausaid.CityDevelopmentscameinbetterthanexpected,and'hospitality
wassurprisinglyresilient',headded.
A new accounting treatment of project sales took effect in 2011 for the industry,leading to a slew of 2010 restatements and complicating year-on-year comparisons.
The new rules require revenue for certain projects to be recognised only upon
completion,insteadofbasedonthepercentagecompletionoftheproject.
But the restatements should end for most developers in 2012, and make future
numbersalittlemoreuseful,ifstilllumpy.
'FY12willgivebettercomparisons,'MrLausaid.
Thetechnologysectorwasespeciallybeateninthefourthquarter,theculminationof
theMarchearthquakeinJapan,theeurozonecrisisandthefloodsinThailand,which
wreakedhavoconsupplychains.
VentureCorpwassurprisinglyresilient,andgaveasourceofhope.
'Theoutlookispositive,especiallyforfirstquarterandgoingintosecondquarter,but
visibilityisstilllow,'saidDBSanalystTanAiTeng.
NeptuneOrient Lineswas the biggest lossmaker, reporting aUS$320million fourth-quarterdeficitinadismalyearforshippingcompanies.
'For the shipping side, in away, it is a very toughenvironment,' UOB-KayHian'sMr
Chowsaid.'Stillalotofoversupply,evenwiththeproposedincreasein(freight)rates.'
Source:TheBusinessTimes
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