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Stocks In Focus SG (Wilmar Int’l, 800 Super, CCFH) – 07/08/13
Wilmar Posts 86.5% Jump In 2Q13 Earnings
Wilmar International posted an 86.5 percent jump in net profit to US$218.5 million for the second quarter despite a 5.4 percent decline in revenue to US$10.4 billion. Excluding the non-operating items, net profit from operations for the quarter increased 42.4 percent to US$245.4 million. Notably, most key segments delivered higher profit with its oilseeds and grains contributing strongly to the improvement as it swung back to profit from losses last year. Its sugar segment also reported lower seasonal losses and enjoyed higher merchandising and processing profit. However, its plantations and palm oil mills continued to be affected by lower crude palm oil prices and production yield. For the six months period, revenue declined 4 percent to US$20.6 billion while net profit jumped 43.1 percent to US$533.9 million.
Significance: Wilmar declared interim dividend of $0.025 per share with record date on 20 August 2013. It notes that while the lower palm oil prices add to the challenges as palm oil fell to its lowest in more than three years last month and have declined 7.9 percent this year, it expects the cheaper costs for commodities to be beneficial, as lower raw material costs for its downstream products will have positive contributions.
800 Super Wins $160.6m Public Waste Collection Contract
800 Super Holdings through its wholly‐owned subsidiary, 800 Super Waste Management, has been awarded a public waste collection licence by the National Environmental Agency for the provision of waste collection services to domestic and trade premises in the Ang Mo Kio – Toa Payoh sector in Singapore. The licence, with an aggregate contract value of approximately $160.6 million, will commence from 1 January 2014 to 30 September 2021. Commenting on the contract won, chairman of 800 Super, Lee Koh Yong, gave credit to the company’s cost-efficiency and quality of its waste management and recycling services.
Significance: The award of the licence is expected to contribute to the revenue of the group over the duration of the contract and is expected to have a material positive impact on the company’s earnings per share and net tangible assets per share for the current financial year ending 30 June 2014.
CCFH’s 2Q13 Net Profit Records 640.5% Growth Y-o-Y
CCFH announced its unaudited second quarter financial results for the three-month period ended 30 June 2013, with a 640.5 percent increase in its net profit to $0.8 million from $0.1 million in 2Q12. The increase in net profit is attributed to a 22.8 percent increase in revenue from $7.6 million for 2Q12 to $9.3 million in 2Q13, primarily driven by the increase in revenue from the group’s original design manufacturing (ODM) division by 30.2 percent from the improved sales to the European and South American markets, and revenue contributed by the sourcing and procurement (S&P) division. In addition, the group also achieved an increase in gross profit of $0.6 million to $2.6 million in 2Q13 with gross profit margin increasing slightly by 2.2 percent to 28 percent in 2Q13, driven by higher sell prices from the ODM division, and contribution from the base metal trading under the S&P divison.
Significance: CCFH believes that the global resources and energy market would offer business opportunities which will be sustainable over the next five to ten years, with increasing urbanisation and industrialisation in emerging economies such as China. The group is confident to seize these opportunities to grow its business and improve its profitability.
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