The 2022 results season for Singapore listed companies has concluded. Many stocks underperformed due to various reasons such as a higher interest rate environment, slowing growth and inflationary pressures, resulting in lower profits and dividends for shareholders.
However, there are a couple of exceptional ones. Here we look at 5 stocks that increased dividends this year.
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Some of these companies recorded fundamental growth while others were reopening themed plays or benefited from a higher interest rate environment.
1) Genting Singapore (SGX: G13)
Genting Singapore operates Resorts World Singapore, an integrated resort with its casino, theme park and oceanarium as its key attractions.
The company’s performance rebounded strongly from the growth of Singapore’s international tourist arrivals. Both revenue and profit for 2H FY22 more than doubled, as gaming and non-gaming revenue increased.
On a full year basis, revenue increased 62% from $1.07 billion in FY21 to $1.73 billion in FY22. Net profit increased 85% from $183 million in FY21 to $340 million in FY22.
Consequently, earnings per share increased from 1.52 cents in FY21 to 2.82 cents in FY22.
Genting proposed a final dividend of 2 cents per share and combined with its interim dividend of 1 cent, equals to a total dividend of 3 cents per share.
Genting’s expansion projects (RWS 2.0) have commenced. This includes the ongoing construction of the Singapore Oceanarium (SGO), Minion Land at Universal Studios Singapore, and supporting infrastructure facilities to cater to the overall expansion of RWS.
RWS has also been successful in securing premium lifestyle events that appeal to affluent visitors. In the upcoming months, RWS will be the official venue to host several signature events in Singapore such as the Asia’s 50 Best Restaurants 2023 and the third edition of Wine Pinnacle Awards 2023.
2) Jardine C&C (SGX: C07)
Jardine C&C, achieved a record profit in 2022 as its major subsidiary Astra as well as some of its strategic investments achieved record profits.
Jardine C&C’s revenue increased 23% from US$17.7 billion to US$21.8 billion. Underlying profit increased 39% from US$0.8 billion to US$1.1 billion.
Astra Indonesia, its largest subsidiary recorded 39% higher profits driven by recovery in the Indonesian economy and higher commodity prices
Truong Hai Group Corporation, its strategic interest in Vietnam contributed 34% higher profits due to strong performance in its automotive business.
Jardine C&C’s direct motor interests which consists of its Cycle & Carriage automotive group contributed 62% higher profits.
Consequently, underlying earnings per share increased from US$1.99 to US$2.77. Dividends increased in line from US$0.80 to US$1.11 per share.
During the year, Jardine C&C increased its stake in some of its subsidiaries and investments such as the delisting of C&C Bintang, thus increasing total profit contribution to the conglomerate.
Its subsidiaries and investments also carry out their own strategic investments as and when a target is identified. In FY21, Astra invested in Bank Jasa Jakarta, a bank in Indonesia for US$260 million with plans to transform this bank into a digital bank. Astra also acquired a 31.5% interest in Arkora Hydro, a hydro-based energy power generation and a 7.4% interest in Medikaloka Hermina, a large hospital group in Indonesia.
3) CapitaLand Ascott Trust (“CLAS”) (SGX: HMN)
CLAS is another reopening and travel recovery related play.
CLAS’ properties achieved strong operating performance. Revenue per available unit (REVPAU) increased 81% YoY to S$143 for 2H22.
This was due to the accelerated increase in 4Q22 as REVPAU rose 78% YoY to S$155. 4Q22’s REVPAU reached pre-pandemic levels. All of CLAS’ key markets registered QoQ REVPAU growth, with the biggest improvements in Japan, Australia and the USA.
CLAS increased its Distribution per Stapled Security (DPS) for 2H22 by 47% year on year to 3.33 cents. DPS for FY22 increased 31% y-o-y to 5.67 cents.
CLAS recorded a gross fair value gain of about $200 million on the value of its portfolio, notwithstanding higher capitalisation and discount rates. This was due to stronger operating performance and improving outlook for its properties.
4) ComfortDelGro (“CDG”) (SGX:C52)
CDG’s registered FY22 revenues of $3.8 billion, a 7.9% increase over FY21 as economies recovered.
Despite inflationary pressures, net profit increased 41% from $123 million in FY21 to $173 million in FY22.
Consequently, earnings per share increased from 5.68 cents in FY21 to 7.99 cents in FY22.
CDG proposed a final dividend of 4.22 cents per share, comprising of 1.76 cents in a final dividend and 2.46 cents in a special dividend. The company had given out an interim dividend of 4.26 cents per share, comprising 2.85 cents in an interim dividend and 1.41 cents in a special dividend.
The total dividend for FY22 is 8.48 cents per share, comprising 4.61 cents in ordinary dividends and 3.87 cents in special dividends.
Looking ahead, CDG has benefited from a portfolio that is diversified across geographies and industries and will continue to grow its overseas portfolio by actively participating in both bus and rail tenders.
In Singapore, CDG is expected to continue its resilience, with public transport services supported to some extent by wages and energy indexation on public bus contracts.
Taxi revenues are expected to improve as Singapore moves towards a semblance of pre covid business and tourism activity.
Its worth nothing that CDG has a cash position of $967 million and net cash position of $674 million, amounting to $0.30 per share or approximately 25% of market capitalisation based on a share price of $1.20.
5) Singapore banks
All three Singapore banks increased dividends this year.
DBS (SGX: D05)
DBS saw revenue growth of 16% and achieved a net interest margin (NIM) of 1.1%. Non-performing loans stood at 1.1% while its Tier 1 Capital Adequacy Ratio (CAR) was at 14.6%.
Dividends increased from $1.20 in FY21 to $2 in FY22. FY22’s dividend included a $0.50 special dividend. DBS’s FY23 ordinary dividend is expected to be at $0.42 per quarter based on its 4Q final dividend of the same amount.
OCBC (SGX: O39)
OCBC managed a revenue growth of 10% and achieved a NIM of 1.91%. Non-performing loans stood at 1.2% while its Tier 1 CAR was at 14.4%.
Dividends increased from $0.53 in FY21 to $0.68 in FY22. Moving forward, dividends are expected to be based on a 50% payout ratio.
UOB (SGX: U11)
UOB recorded revenue growth of 18% and achieved a NIM of 1.86%. Non-performing loans stood at 1.6% while its Tier 1 CAR was at 1.7%.
Dividends increased from $1.20 in FY21 to $1.35 in FY22. UOB remains committed to a dividend payout ratio of 50%, subject to a minimum Tier 1 CAR of 13.5% and sustainable financial performance.
Click here to retrieve a copy of our Singapore Bank Report for FY22.
More to come?
Some of the stocks mentioned could potentially extend their dividend hikes.
- Genting Singapore’s recovery has likely just commenced.
- Similarly for CapitaLand Ascott, with China recently relaxing PCR requirements, we will likely see higher velocity of both inbound and outbound travel from China.
- Jardine C&C seems to be coming out with all guns blazing as various parts of the conglomerate is recording strong profits. The company, its subsidiaries and investments are also investing in new assets to seek new avenues of growth.
As for ComfortDelGro and the three banks, their dividend growth may be more in sync with the overall economic performance. Should the global economy taper its growth in FY23, we may not see special dividends and their ordinary dividends will likely be maintained or even reduced.
The Singapore banks do not increase their dividends every single year. However, they have proven that they have the ability to record structural growth and provide for higher dividends over time, especially over the recent few decades.
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