(Aug 21): Corporate earnings for 2Q2017 were not great. Of the Straits Times Index’s 30 component companies, 14 missed market expectations, while 11 outperformed, says Margaret Yang, an analyst at CMC Markets, citing Bloomberg data. The remaining five companies did not have a consensus forecast.
Among the ones that reported especially weak numbers were those in the offshore and marine sector as well as the commodities sector. In particular, Keppel Corp, Sembcorp Industries and Wilmar International posted poorer results against the backdrop of muted crude oil prices and challenging operating conditions. On the other hand, local banks DBS Group Holdings, Oversea-Chinese Banking Corp and United Overseas Bank delivered strong results for the quarter, as did property developers such as CapitaLand and UOL Group.
Our Singapore Market Portfolio suffered its share of weak results. Notably, gold miner CNMC Goldmine Holdings continued to be hit by lower ore grade from its sole operating mining concession in the Malaysian state of Kelantan for the third straight quarter. In its 2QFY2017 results ended June 30, the company sold 3,835.5oz of gold, down 60.9% y-o-y. That led to a 61.5% y-o-y drop in revenue to US$4.9 million ($6.7 million). In addition, the company’s all-in costs rose to US$1,115 an ounce from US$500 an ounce last year. As a result, earnings plunged 89.8% to US$478,381 from US$4.7 million a year ago.