Yahoo Finance 
Stocks In Focus SG (Eu Yan Sang, NOL, 3Q13′s Pessimism) – 31/10/13
Eu Ya Sang’s 1Q14 Earnings, Up More Than 4 Folds
Eu Yan Sang International, has in its 1Q14 earnings reflected a net profit of $1.4m, which reflects a gain of more than 4 folds, when compared to the earnings of $0.3m in 1Q13. The much better performance is largely attributable to higher revenue contributions and lower foreign exchange losses. The better earnings also translated to a higher earnings per share (EPS) of 0.32 cents for 1Q14, compared to 1Q13’s EPS of 0.08 cents. 1Q14 revenue showed a 12.7 percent rise to $79.5 million when compared to that of 1Q13, which was largely due to growth from its Australia and Hong Kong operations. The company expressed that it expects economic growth in its markets to continue to grow at a modest pace, and expects its core business to remain profitable, while it expects to see significant improvements from its operations in China and Australia.
Significance: It is noteworthy that despite the rising cost of sales as a result of the increased revenue, overall gross margin was not compromised and was still maintained above the 50 percent mark. The cash chest of Eu Yan Sang has also increased from $23.8m in 1Q13 to $86.1m in 1Q14, which gives the company more room for considerations in terms of further potential acquisitions, or expansions.
NOL Posts Weak 3Q13 Earnings
Neptune Orient Lines (NOL) reported a 60 percent decrease in net profit for 3Q13 from US$50 million to US$20 million, compared to the same quarter last year. Revenue was also down 10.4 percent to US$2.1 billion from US$2.3 billion for the current quarter ended 20 September 2013. Subsequently, 3Q13’s earnings per share slumped to 0.77 US cents from 1.94 US cents on a year-on-year basis. Weaker earnings were mainly attributed to a sharp decline in freight rates from the oversupply conditions of the industry, where total container volumes of its container shipping business, American President Lines, were reduced by 5 percent from the previous year. In addition, average revenue per forty-foot equivalent unit also decreased 9 percent to US$2,372 between 3Q13 and 3Q12. Despite the weak overall performance, NOL’s logistics business registered a 1.6 percent increase in revenue to US$371 million compared to the same quarter last year.
Significance: As a result of adverse market conditions in 3Q13, NOL was unable to lift its earnings during this peak season. The company does not foresee freight rates and the oversupply conditions to improve anytime soon. Corresponding to this, NOL is also taking actions to restructure its capacity and service networks to align better with lower demand present in the current market.
Consumers More Confident But Remains Pessimistic In 3Q13
Despite a fall in consumer confidence level during 4Q12 and remaining stagnant since then, however, according to Nielsen’s Global Survey of Consumer Confidence, consumer confidence level in Singapore has rebounded to the same level, compared to one year ago, in 3Q13. This was as a result of Singapore’s higher-than-expected gross domestic product growth in 2Q13. On the other hand, Singapore’s exact measurement of consumer confidence was recorded at 98 points and based on Nielsen’s measure, confidence level below and above 100 points represents pessimism and optimism respectively. On a global scale, consumer confidence has increased for more than half of the 60 markets measured with a global average of 94 points for the quarter.
Significance: Following the better consumer confidence level in 3Q13 for Singapore, there was a 6 percentage point increase in respondents planning to impart their spare cash into investments in shares of stocks and mutual funds. However, the percentage of these respondents remains well below 50 percent, at 30 percent, implying that it might still take some time before confidence is restored to the financial markets in Singapore.
More From Shares Investment:
