Singapore companies reported weaker profits for the first three months of the year as banks outperformed and transport and commodity companies disappointed.

Data compiled by BT for companies with a financial first quarter that ends on March 31 show total net profit for 353 listed companies at $7.7 billion, down 3.5 per cent from the same period last year. About a quarter of these companies were in the red ‐ slightly more than a year ago. Of the 260 companies in the black, about half made higher profits and two‐fifths made lower profits. The remainder went from losses to profits.

Valuations are not too detached from reality, but not cheap either. The Singapore market is trading near 15  times of its 12‐month forward price‐to‐earnings ratio, around its 10‐year average. The Straits Times Index is above 3,400 points. Valuations are still below the heady years of 2007‐8 when the market traded above two
standard deviations from the historical price to earnings mean. Transport operators such as SIA, SMRT and NOL, and commodity companies came up short. On the transport front, local rail operator SMRT fell into the red with a net loss of $12 million for its fourth quarter ended March 31, as it recorded higher salary costs and maintenance expenses. Shipper NOL posted a US$76 million profit due to a one‐time US$200 million gain from the sale of its headquarters building in Singapore, but remained loss‐making otherwise amid overcapacity in the shipping sector.

SIA was in the black and was boosted by a gain of disposal of aircraft, spares and spare engines. But it continued to face competitive pressures and operating losses deepened from $5.2 million a year ago to $44.2 million for its fourth quarter ended March 31. Taxi and bus operator ComfortDelGro is still doing well, however, having reported higher net profit of $57.7 million for the first quarter, up 7.9 per cent, due to broad‐based revenue growth.

Source: AmFraser