ST Engineering Announces Final Dividend of 10 cents

ST Engineering Logo

ST Engineering announces its financial year 2015 results on 26th February 2016. Revenue fell slightly by 3% from 6,539 million to 6,335 million dollars. Earnings per share fell slightly from 17.06 cents to 17.05 cents.

With the announcement of final dividend of 10 cents, this brings the total dividend for FY15 to 15 cents which is the same as FY14. Personally, I felt the results are pretty good given the weakness in the Marine sector. Currently, ST Engineering is the largest percentage holding in my portfolio by invested amount.

Financial Results FY2015

For the year ended 31 December 2015 FY15 FY14 Growth %
Revenue ($m) 6,335 6,539 (3)
Earnings before interest and tax (EBIT) ($m) 510.3 555.0 (8)
Other income, net ($m) 55.5 40.2 38
Finance income/ (costs), net ($m) 6.2 (1.7) 479
Profit before tax (PBT) ($m) 630.3 650.7 (3)
Profit attributable to shareholders ($m) 529.0 532.0 (1)
Earnings per share (cents) 17.05 17.06
Economic value added (EVA) ($m) 366.2 344.5 6
Return on equity (%) 24.8 24.9 NM
Dividend per share (cents) 15.0 15.0
Final 10.0 11.0
Ordinary 5.0 4.0
Special 5.0 7.0
Interim – Ordinary 5.0 4.0

Revenue

Revenue for ST Engineering comes mainly from 4 segments. They are Aerospace, Electronics, Land Systems and Marine. A small percentage comes from others. The electronics segment did well. Given the current market weakness in Marine, you can see the revenue from its Marine segment fell significantly by 29%.

$m FY2015 % FY2014 % Change %
Aerospace 2,090 33 2,061 32 1
Electronics 1,709 27 1,583 24 8
Land Systems 1,396 22 1,397 21
Marine 958 15 1,341 21 (29)
Others 182 3 157 2 16
Group 6,335 100 6,539 100 (3)

Dividends

At the average share price of $3.21 and total dividends of 15 cents, the dividend yield is at 4.68%. Do note that dividend yield for you may be different depending on the price you buy the stock at. (Dividend yield = Total Dividends/Share Price Bought)

NeraTel Cuts Dividend from Two Cents to One Cent

NeraTel Payment Terminal

NeraTel announces its 4Q2015 results on 24th February 2016. Profit after tax for the full year fell 17.4% from $16.2 million to $13.4 million. A final dividend of one cent was declared as compared to two cents a year ago.

NeraTel business comprises of two main segments. They are Telecommunications and Info-communications.

Telecommunications

Compared to FY 2014, turnover for FY 2015 declined 6.7% ($4.1 million) from $61.9 million to $57.8 million. The decrease was due to lower sales in the Middle East and Africa market.

Info-communications

Network Infrastructure

Compared to FY 2014, turnover for FY2015 declined 4.5% ($3.6 million) YOY from $80.6 million to $77.0 million. The decline in turnover for the quarter and FY2015 mainly resulted from lower sales of network equipment to the Service Provider market sector.

Payment Solutions

Compared to FY 2014, turnover for FY2015 increased 17.2% ($6.8 million) YOY from $39.9 million to $46.7 million as a result of higher contribution from terminal sales and leasing.

Dividends

With the final one cents dividend being declared, this brings the total dividend paid for 2015 to 3.5 cents.

Year 2010 2011 2012 2013 2014 2015
Total dividend (cents)  3  4  4  6  4  3.5
Earnings per share (cents)  3.02  3.73  5.36  6.48  4.48  3.7
Dividend payout ratio (%) 99  107  75 93  89  94.6

Again NeraTel’s dividend payout ratio near to 100%. Is this sustainable?

Far East Hospitality Trust DPU Fall for 4Q 2015

FEHT Logo

Far East Hospitality Trust (“FEHT”) announces its 4Q2015 results on 24th February. Distribution Per Unit (“DPU”) for 4Q2015 fell 8.6% to 1.17. The annualised DPU fell 10.5% to 4.60 centsNet Property Income fell 4.9% as compared to 4Q2014.

Unless tourism picks up, I am expecting the hospitality sector to be soft and DPU to fall further for FEHT.

4Q2015
(S$’000)
4Q2014
(S$ ‘000)
YoY(%)
Gross Revenue 28,851 30,280 (4.7)
Net Property Income 26,289 27,652 (4.9)
Distributable Amount 20,649 22,858 (9.7)
Distribution Per Unit (“DPU”) (cents) 1.17 1.28 (8.6)
Annualised DPU (cents) 4.60 5.14 (10.5)

Occupancy

FEHT 4Q2015 Occupancy

Hotels

The revenue per available room (“RevPAR”) of the hotel portfolio fell 4.4% year-on-year to $146 in 4Q 2015, mainly due to a 7.6% year-on-year decrease in the average daily rate (“ADR”).

Serviced Residences

The revenue per available unit (“RevPAU”) was down by 13.5% year-on-year to $180 in 4Q 2015.

Things to Note

Bleak Tourism Outlook

International visitor arrivals to Singapore was fairly flat with a slight 0.4% increase year-on-year for the first eleven months of 2015.

Biennial and new MICE events in 2016

Hospitality sector may benefit from biennial and new MICE events in 2016. E.g. Singapore Airshow, World Rugby Sevens Series)