Earnings Season is Around the Corner: 4 Singapore Stocks That Could Increase Their Dividends

An earlier version of the article appeared on The Smart Investor website.

Half of 2023 is over in the blink of an eye, and now it is time once again for the next earnings season.

Most companies with a December fiscal year-end will be reporting their first-half results in due course.

Investors should take this opportunity to monitor and scrutinise the results of the companies they own or are eyeing to see how they are coping with the twin challenges of high inflation and rising interest rates.

Luckily, there are a handful of companies that look well-positioned to stand firm despite these headwinds.

These stocks, which include two blue-chip companies, may even raise their dividends when they next report their results.

Here is a list of four Singapore businesses that could announce a higher payout.

Genting Singapore (SGX: G13)

Genting Singapore is the owner and operator of Resorts World Sentosa (RWS), an integrated resort (IR) with around 1,600 hotel rooms, a casino, and one of the world’s largest aquariums.

The group reported a strong set of earnings for its fiscal 2023’s first quarter (1Q 2023).

Gaming revenue jumped 45% year on year to S$339.9 million while non-gaming revenue surged by 89% year on year to S$144.4 million.

The better results were the result of border reopenings as more people travelled overseas for vacations.

Net profit for 1Q 2023 has more than tripled year on year from $40.4 million to $129.2 million.

With China and Hong Kong announcing their reopening in January, Genting Singapore’s second quarter looks promising as air travel continues to surge.

There is a high chance the business can pay out a higher interim dividend than the S$0.01 that was paid out last year.

Meanwhile, RWS has also soft launched its newly-rebranded Hotel Ora with 389 rooms back in April.

The Forum at RWS is also undergoing a facelift and will be ready by end-2024, transforming into a central lifestyle connector that will see its gross floor area more than doubled to around 20,000 square metres over three levels.

Keppel Corporation Limited (SGX: BN4)

Keppel Corporation is a global asset manager and operator in the areas of infrastructure, real estate and connectivity.

The group operates in more than 20 countries providing services for clean energy, sustainable urban renewal, and digital connectivity.

Keppel, like Genting Singapore, also reported a strong 1Q 2023 with both revenue and net profit rising year-on-year.

In addition, the group also achieved asset monetisation of S$4.9 billion announced to date, putting it on track to achieve its S$5 billion monetisation target.

If Keppel can keep up the momentum, there is a decent chance it can pay out an interim dividend that is higher than the S$0.15 that was paid in the prior year.

The group is hard at work on business initiatives to create more value for shareholders.

In late May, Keppel partnered with United Overseas Bank (SGX: U11) to jointly develop and provide businesses with a comprehensive suite of sustainability and digitalisation solutions.

Elsewhere, the asset manager is also building up its energy-as-a-service (EAAS) business in both Thailand and Vietnam.

Keppel secured two contracts for EAAS for a hotel and shopping mall in Bangkok last month and secured contracts worth over US$70 million to provide long-term EAAS to several locations in Ho Chi Minh earlier this month.

StarHub Ltd (SGX: CC3)

StarHub is a telecommunication company that offers mobile, broadband, and cable TV services to households and delivers cybersecurity and data analytics services to businesses.

Its 1Q 2023 results saw total revenue rise 8.7% year on year to S$557.4 million, lifted by growth across most divisions and the consolidation of MyRepublic broadband.

Net profit climbed 26% year on year to S$37.5 million.

StarHub’s service EBITDA (earnings before interest, taxes, depreciation and amortisation) margin also exceeded expectations at 22.4%, higher than the projected 20%.

The average revenue per user also saw year-on-year rises across StarHub’s three major business segments.

With tourist numbers increasing as air travel rebounds, StarHub looks well-positioned to see its mobile division benefit.

If the telco does well, it may pay out a higher interim dividend than the S$0.025 that was paid out in 2022.

Civmec Ltd (SGX: P9D)

Civmec is an integrated construction and engineering services provider to the energy, resources, and infrastructure sectors.

Its capabilities include heavy engineering, shipbuilding, industrial insulation, and maintenance among others.

The group reported a stellar set of earnings for the first nine months of fiscal 2023 (9M FY2023) ending 31 March.

Revenue rose 4.2% year on year to A$606.6 million while net profit jumped 23.4% year on year to A$42.9 million.

Civmec also saw cash generated from operations more than quadruple year on year from A$13.9 million to A$67.7 million.

In addition, its order book also inched up marginally by 0.9% in the last three months to A$1.19 billion.

Civmec had already doubled its interim dividend to A$0.02 back in February when it announced its first-half results.

Should its full-year results show a continued increase in cash flow and profits, the engineering group may be poised to increase its final dividend.

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Disclosure: Royston Yang does not own shares in any of the companies mentioned.

This article was written by Royston Yang for The Smart Investor.