The Singapore earnings season gets back into full swing next week after a five-day mini lull.
On tap are many businesses that could be impacted by the Wuhan virus outbreak. So, whilst the quarterly numbers will be duly digested, it could be what these companies might have to say in terms of forward guidance that could be more interesting.
Genting Singapore (SGX: G13) will report full-year numbers. In November, the integrated resort owner posted a 24% drop in third-quarter profits as a result of higher cost of sales. Revenue fell 6.7%. The operator of Resorts World Sentosa said it faced a “confluence of headwinds”. Little did it know that the confluence would turn into a deluge.
The travel industry, which is bearing the main brunt of the Wuhan virus outbreak, is the mainstay of SATS (SGX: S58). In November, the airport-services company registered a 7.6% fall in second-quarter profit on lower cargo volume and lower contributions from its food solutions business. It is pencilled in for third-quarter numbers.
Singtel (SGX: Z74) said second-quarter profit was hit by provisions at its associate Bharti Airtel. The telecom company was surprised by a Supreme Court ruling that ordered Indian telecom operators to pay the state billions in past dues.
Loan growth, record fee income and higher trading gains boosted third-quarter profit at DBS Group (SGX: D05). Singapore’s largest bank said it should be in a good position to deliver healthy shareholder returns despite the prevailing macroeconomic and geopolitical headwinds. That was before the Wuhan virsu outbreak.
Thai Beverage (SGX: Y92) posted a 33% jump in full-year net profit in November. Growth was attributed to a rise in its spirits business and a surge in beer sales. Investors will be keen to hear more about the possibility that it could spin off its beer business.
Already hobbled by a flagging taxi business in Singapore, ComfortDelGro (SGX: C52) now must contend with the Wuhan virus outbreak. In November, the taxi operator posted a 10.8% drop in third-quarter earnings, even though revenue rose 1.1%. It added that the weakening global economic and political environment had weighed on its business.
Singapore Airlines (SGX: C6L) recorded a 68% surge in second-quarter profit in November. This was in spite of losses at its subsidiary Scoot and the grounding of six Boeing 737 Max8 jets. The Singapore flag carrier said the jump in profit was due to improvement in its share of results from associate and joint ventures.
On the economic front, inflation numbers from the US could show that consumer prices were 2.4% higher in January than a year ago. That compares with an inflation rate of 2.3% last month. That could put a bit of pressure on Fed Chair Powell when he testifies before Congress.
China will report inflation numbers too. It could show that prices rose 5.1% in January, which would the fastest rate of increase since 2012.
Both the UK and China will report GDP numbers for the final quarter of 2019. They are expected to confirm a slowdown their economic growth rates. The UK could say that annual economic growth slowed from 1.1% to 0.9%, while Japan’s economic growth could have moderated from 1.8% to1.5%.
And finally, Malaysia could say that its economy grew 4.4% in the fourth quarter. The country is also expected to say that retail sales grew 7.1% in December.
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Disclosure: David Kuo owns shares in SATS, Thai Beverage and DBS.