With the earnings season winding down, it is time to take stock of how businesses performed in an environment of high inflation and surging interest rates.
Many companies have reported a higher cost base along with lower earnings.
However, there are several who have beaten the odds and posted higher profits despite the tough macroeconomic environment.
As an investor, you need to assess if this performance can be sustained moving forward as these headwinds may not abate anytime soon.
We present four Singapore stocks that announced better results for the latest earnings report.
MindChamps Preschool (SGX: CNE)
MindChamps is a premium preschool operator in Singapore with outlets and enrichment centres in Australia, the Philippines, Myanmar, Malaysia, and Indonesia.
For the first half of 2023 (1H 2023), the group reported an 11% year on year rise in revenue to S$35.2 million.
The higher revenue came from the sale of master franchise licences in the US and Australia as well as an increase in school fees from organic growth in Australia.
Gross profit jumped 27% year on year to S$19.8 million while net profit more than quadrupled year on year to S$7.1 million.
As of 30 June 2023, MindChamps held S$4.2 million of cash and S$16.3 million of debt on its balance sheet.
The education group’s free cash flow also soared 140.6% year on year from S$2.2 million in 1H 2022 to S$5.4 million in 1H 2023.
MindChamps is looking at further growth and recently appointed another master franchise licence for Western Australia with a flagship centre set to open in Perth in the first quarter of 2024 (1Q 2024).
The group is also registered in every major US state and is on track to extend its presence there.
Talkmed Group Ltd (SGX: 5G3)
Talkmed is a provider of tertiary healthcare services to oncology patients in Singapore and the region.
Some of its services include medical oncology, stem cell transplant, and palliative care.
Talkmed’s 1H 2023 revenue climbed 16.4% year on year to S$37.8 million as the reopening of borders brought more patients into its clinics compared with the year before.
Net profit rose 9.1% year on year to S$12.5 million.
Free cash flow jumped 47.2% year on year from S$14.6 million to S$21.4 million.
Despite the better performance, Talkmed declared a slightly lower interim dividend of S$0.009 compared with the payment of a S$0.015 dividend in the prior year.
The Singapore Ministry of Health introduced a cancer drug list where only certain drugs can be claimed using Medisave, Medishield Life, or integrated Shield Plans.
As a result, Talkmed saw local patient numbers negatively impacted in 1H 2023 and expects patient numbers to be soft for 2023.
However, the group will continue to pursue growth in foreign patients.
It also plans to raise the profile of its centres in Hong Kong and China to grow its patient numbers there while hiring more experienced doctors and medical professionals.
NetLink NBN Trust (SGX: CJLU)
NetLink NBN Trust builds, owns, operates, and designs the passive fibre network infrastructure for Singapore’s nationwide broadband network (NBN).
Because of NetLink’s extensive network, internet coverage is provided to residential and non-residential premises in Singapore and its surrounding islands.
For its fiscal 2024’s first quarter (1Q FY2024) ending 30 June 2023, revenue rose 6.2% year on year to S$103.9 million with more ancillary projects and a higher level of connection orders.
Net profit inched up 2.1% year on year to S$28.2 million.
Residential connections have increased slightly to 1.489 million in 1Q FY2024 compared with 1.485 million as of 31 March 2023.
Non-building address points and segment connections also saw quarter-on-quarter increases to 2,757 and 3,003, respectively.
Credit Bureau Asia (SGX: TCU)
Credit Bureau Asia, or CBA, provides credit and risk information solutions to banks, financial institutions, telecommunication companies, and government bodies.
For 1H 2023, revenue improved by 12.3% year on year to S$26.4 million as there was overall higher demand for risk management and business information products and services.
Trade activities resumption also gave a boost to its compliance and due diligence search division.
The group’s net profit climbed 17.7% year on year to S$4.7 million.
CBA’s free cash flow increased 13.8% year on year to S$11.8 million for 1H 2023.
Its interim dividend was kept constant at S$0.017 per share.
With digital banks in Singapore introducing more products and services, CBA stands to benefit from these banks’ customer acquisition and monitoring activities.
Management also expects its Cambodia division to expand its business offerings with the division projected to grow in tandem with the Cambodian economy.
Over in Myanmar, CBA has signed up 27 banking financial institutions as members and more than 40 non-bank financial institutions and foreign banks are awaiting regulatory approval.
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Disclosure: Royston Yang owns shares of NetLink NBN Trust.
