Earnings Updates: ComfortDelGro, SATS, Silverlake Deliver Strong Results – Time to Consider Investing?

November 17, 2023

In a market rife with challenges, ComfortDelGro Corporation Ltd (SGX: C52), SATS Ltd (SGX: S58) and Silverlake Axis Ltd (SGX: 5CP) have emerged as strong performers.

With their latest earnings defying the pressures of rising interest rates and global inflation, these companies from the transport, aviation, and tech sectors are shining examples of resilience.

Here is a look at some key highlights from their earnings as we assess whether they present a golden opportunity for investors to invest.

ComfortDelGro’s earnings: Steady recovery and promising trajectory

ComfortDelGro, one of Singapore’s leading transport companies, has shown a promising trajectory in its latest earnings report for the third quarter of 2023.

Here are the key highlights:

Robust PATMI Growth: The Profit After Tax and Minority Interests (PATMI) for Q3 surged to S$50 million, marking a significant 54% year-on-year (yoy) increase.

Revival of UK Operations: The UK sector, which had been struggling, reported a turnaround with an EBIT of S$6.1 million.

Stable Singapore Operations: Despite intense competition and rising utility costs, the Singapore operations exhibited stable performance with a slight increase in earnings before interest and tax (EBIT) to S$53.6 million.

Future Outlook: The market remains optimistic and is expecting further earnings recovery in Q4 2023.

Potential Risks: Investors should be cautious of a some of these key risks including slower margin recovery and the impact of foreign exchange fluctuations.

The company’s strategic moves and operational efficiency, especially in the UK and Singapore markets, have been pivotal in driving this positive trend. With an eye on sustaining this momentum, ComfortDelGro looks set to navigate the dynamic transport sector landscape effectively.

SATS’ earnings: Strong turnaround in Q2 2024

SATS Ltd, a prominent provider in aviation catering and gateway services, has made a notable comeback to profitability in its Q2 2024.

Here are some key highlights investors should focus on:

Return to Profitability: SATS Ltd reported a core PATMI of S$16.8 million, surpassing expectations and signalling a strong recovery.

Revenue Momentum: A 7% quarter-on-quarter (qoq) revenue growth was observed, outpacing operating expense growth and showcasing better operating leverage.

Revival of Food Solutions Segment: This segment recorded an EBIT of S$2.7 million, a significant improvement and a potential growth driver.

Cashflow Concerns: Despite the positive earnings, there was an operating cash outflow of S$10.0 million, underlining the need for effective cash management.

Future Prospects: With the year-end travel season approaching, I believe that quarters ahead will report better earnings, driven by the ongoing recovery in the aviation industry.

SATS Ltd’s performance in this quarter marks a critical step in its journey to not only navigate the challenges posed by the global pandemic but also to leverage emerging opportunities in the aviation sector.

Silverlake: Sustaining growth through strategic wins

Silverlake Axis, a leading provider of digital economy solutions and services, has reported encouraging results for Q1 2024.

Here are some key takeaways from its latest earnings result:

Consistent Net Profit: SILV posted a core net profit of S$48.9 million, aligning with estimates and reflecting a steady performance.

Contract Wins: The company secured approximately RM125 million worth of contracts, maintaining robust order momentum.

Revenue Projections: Despite a slight shortfall in revenue expectations, reduced taxes compensated for this, keeping the company on track.

Innovative Product Focus: SILV is concentrating on a multi-product strategy, including both on-premise and cloud-based solutions, to cater to diverse market needs.

Outlook and Growth: The company remains confident in its revenue targets, driven by demand for advanced banking technology solutions.

Silverlake Axis’s strategic focus on securing new deals and enhancing its product offerings underlines its commitment to staying at the forefront of technological advancements in the financial sector.

Positive outlook despite challenging environment

ComfortDelGro, SATS, and Silverlake Axis have each demonstrated resilience and strategic growth in challenging times.

Their robust earnings reflect strength across transport, aviation, and tech sectors, presenting potentially lucrative opportunities for informed investors.

These companies, with their distinct approaches and market adaptations, underscore the diversity and dynamism in today’s investment landscape.

While the strong performance indicate their diverse opportunities, prudent investment decisions should be considered for both the upsides and the risks involved.

Disclaimer: ProsperUs Head of Content & Investment Lead Billy Toh doesn’t own shares of any companies mentioned.

Billy Toh

Billy is passionate about the capital market and believes in investing for the long haul. Prior to this, he was an economist at RHB Investment Bank, covering Thailand and Philippines market. He also worked as a financial journalist at The Edge Malaysia and has experience working with an asset management firm. Aside from the capital market, Billy loves a good conversation over a cup of coffee, is a fitness enthusiast and a tech geek.

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