Share buybacks are one of the methods that companies utilise to create value for their shareholders.
By repurchasing its own shares, companies reduce the pool of issued shares in the market, thereby enhancing the earnings per share, all things being equal.
Share buybacks also signal confidence in the business as only companies that have sufficient cash reserves are able to do so.
Other ways of returning capital to shareholders include the payment of dividends.
This week, we look at four prominent Singapore blue-chip stocks that bought back their shares and also dissect their latest earnings report.
Note: Share buyback details are for the period 22 to 28 November, 2024.
United Overseas Bank (SGX: U11)
United Overseas Bank, or UOB, is Singapore’s third-largest bank by market capitalisation.
The bank repurchased 62,100 shares for a total of S$2.26 million, translating to a payment of around S$36.40 per share.
UOB reported a strong set of earnings for the third quarter of 2024 (3Q 2024).
Total income rose 11% year on year to S$3.8 billion on the back of a 1% year-on-year increase in net interest income to S$2.5 billion.
Fee income also contributed to the increase in total income by rising 7% year on year to S$630 million.
UOB’s core net profit came in at S$1.6 billion, up 11% year on year, and excluded S$28 million of expenses related to its Citigroup (NYSE: C) acquisition.
Healthy demand across sectors helped to boost the lender’s loan book and management saw positive consumer sentiment in ASEAN markets.
For its 2025 outlook, CEO Wee Ee Cheong expects high single-digit loan growth along with double-digit fee income growth.
DBS Group (SGX: D05)
DBS Group is Singapore’s largest bank by market capitalisation and offers a comprehensive range of banking, insurance, and investment services.
The lender bought back 350,000 shares for a total of S$14.7 million, amounting to roughly S$42.04 per share.
Like UOB, DBS Group also reported a robust set of earnings for 3Q 2024, buoyed by overall higher interest rates.
Net interest income rose 3% year on year to S$3.8 billion.
Fee and commission income surged by 32% year on year to S$1.1 billion, culminating in an 11% year on year increase in total income to S$5.8 billion.
Net profit climbed 17% year on year to S$3 billion.
DBS also upped its quarterly dividend by 22% year on year to S$0.54 for 3Q 2024, bringing its annualised dividend per share to S$2.16.
CEO Gupta was sanguine for 2025, and expects group net interest income to remain around 2024 levels.
Non-interest income, however, should see high single-digit year on year growth led by higher wealth management fees and treasury customer sales.
Net profit is projected to be lower than 2024 because of a global minimum tax rate of 15%.
Sembcorp Industries Ltd (SGX: U96)
Sembcorp Industries, or SCI, is an energy and urban solutions provider.
The group has a balanced energy portfolio of 21.2 GW that includes 14.4 GW of gross renewables capacity, across 10 countries.
SCI’s urban development projects also span 14,000 hectares across Asia.
The utility specialist bought back 565,000 shares at an average price of S$5.27 per share, forking out close to S$3 million.
The group reported a mixed set of earnings for the first half of 2024 (1H 2024).
Revenue fell 12% year on year to S$3.2 billion but net profit inched up 2% year on year to S$540 million.
Excluding exceptional items, net profit would have fallen by 12% year on year to S$532 million.
An interim dividend of S$0.06 was paid out, 20% higher than the S$0.05 paid a year ago.
Earlier this week, SCI inked a second power purchase agreement (PPA) with Equinix (NASDAQ: EQIX) to supply up to 58.5 MWp of renewable energy for the next 15 years.
This is the second PPA signed with Equinix with the earlier one for a maximum capacity of 75 MWp.
Seatrium Limited (SGX: 5E2)
Seatrium provides engineering solutions to the global offshore, marine, and energy industries.
The group has more than six decades of experience in the design and construction of rigs, floaters, offshore platforms, and specialised vessels.
Seatrium repurchased 1,015,000 shares, spending a total of S$2 million.
The average price paid per share came in at S$1.97.
Seatrium reported an encouraging business update for 3Q 2024, with three projects delivered to customers year-to-date (YTD).
Its net order book stood at S$24.4 billion as of 30 September 2024, with deliveries stretching till 2031.
The group’s repairs and upgrades division also saw brisk business.
For the first nine months of 2024 (9M 2024), Seatrium completed 192 repair and upgrade projects.
A letter of intent was signed with Japan-based Penta-Ocean Construction to carry out early engineering work for a heavy lift vessel project for the Japanese wind market.
Management sees a positive outlook for the offshore and marine industry and will focus on completing its legacy projects for the remainder of this year.
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Disclosure: Royston Yang owns shares of DBS Group.
