The last earnings season for the year is upon us.
In surveying the challenging business landscape, it’s not easy to find the few gems out there that are still doing well despite the crisis.
Multiple sectors have been badly hit by plunging demand and plummeting revenue.
Only essential services such as semiconductors, financial services and supermarkets have been allowed to operate without much disruption.
While Singapore has seen encouraging signs of keeping the pandemic at bay, for now, other countries have not been so lucky.
The US and Europe continue to grapple with record infection numbers, necessitating draconian lockdowns and movement restrictions.
This scenario is likely to persist for the next few months until an effective vaccine is found, or until these badly-affected countries manage to flatten the infection curve,
NetLink NBN Trust (SGX: CJLU)
NetLink NBN Trust (“NetLink”) designs, builds, owns, operates and Singapore’s next-generation nationwide broadband network.
Its extensive network provides internet coverage to residential homes and a wide range of commercial businesses.
For the group’s fiscal 2021 half-year results ended 30 September 2020, revenue dipped by 2.5% year on year due to lower installation-related and diversion revenue.
The COVID-19 pandemic’s movement restrictions had led to a circuit breaker period in Singapore from April to June, limiting NetLink’s employees from visiting homes to install fibre network connections.
However, total expenses decreased by 3.5% year on year, which resulted in a marginal 1.5% year on year rise in profit after tax to S$44.8 million.
Distribution per unit (DPU) inched up by 0.4% year on year to S$0.0253.
If the DPU is annualised to S$0.0506, NetLink’s shares offer a forward dividend yield of 5.2%.
iFAST Corporation Limited (SGX: AIY)
iFAST is a financial technology company that operates a platform for the buying and selling of securities such as unit trusts, equities and bonds.
The group offers a wide array of over 11,000 investment products including 7,700 funds and over 1,300 bonds.
For the third quarter of 2020, iFAST reported a 35.7% year on year increase in net revenue to S$22.9 million.
Operating profit more than doubled to S$7.4 million, while net profit after tax jumped 150% year on year to S$6.2 million.
Client net asset inflows hit a record high of S$1.07 billion for the quarter, lifting the group’s assets under administration to a new record high of S$12.59 billion as of 30 September 2020.
In line with the strong set of earnings, iFAST increased its interim dividend to S$0.008 from S$0.0075 a year ago.
The group has obtained in-principle approval to carry out regulated securities trading in Malaysia during the quarter, while its China arm has received approval for its registration as a private fund manager.
iFAST intends to roll out its Chinese private fund management business by early 2021.
The group also hopes to clinch the digital wholesale bank licence that it applied together with a consortium that includes Chinese companies Yillion and Hande Group.
Keppel DC REIT (SGX: AJBU)
Keppel DC REIT owns a portfolio of 18 data centres spread across eight countries, valued at around S$2.9 billion as of 30 September 2020.
In a business update provided for its third-quarter results, the REIT reported that gross revenue jumped 46% year on year, while net property income rose 47.6% year on year.
Distributable income also increased by 47.6% year on year to S$40.5 million.
As a result, DPU increased by 22.1% year on year to S$0.02357. The nine-month 2020 DPU was up 16.5% year on year to S$0.06732.
Keppel DC REIT’s shares offer an annualised dividend yield of around 3.3%.
Portfolio occupancy remains high at 96.7%, and the REIT manager is engaging in proactive efforts to increase the occupancy further.
The industry is seeing healthy demand as a result of both the increase in global mobile data traffic and a rise in enterprise spending on cloud infrastructure.
COVID-19 has accelerated the shift towards hosted and cloud collaboration solutions, resulting in higher demand for data centres as more data needs to be stored.
These tailwinds should enable the REIT to post healthy growth in the years ahead.
As an investor, you might wonder what the future holds for the REITs in your portfolio. Or how to select REITs that can make you money as Singapore’s economy struggles to recover from the pandemic.
Download your FREE special REITs report: “How You Can Make Money Investing In REITs As Singapore Recovers” HERE!
Disclaimer: Royston Yang owns shares in NetLink NBN Trust, iFAST Corporation Limited and Keppel DC REIT.