Singapore stock preview: Wilmar, OCBC, Sembcorp Industries

These are the SGX-ST mainboard stocks to note for the week of 22 February 2021.

Wilmar International (SGX: F34)

Wilmar International is scheduled to release its fourth quarter and full-year results for the financial year ending 31 December 2020 after market close on Monday (22 February 2021).

In the third quarter of 2020, the agribusiness group recorded a core net profit of US$501.4 million for the quarter, against US$419.2 million in the same period a year prior.

This was the highest third quarter core results since Wilmar’s listing debut in 2005.

The group also recorded stronger contributions from its associates and joint ventures, particularly from India and Africa. Together with non-operating gains from investment activities, net profit for the quarter increased by 20% to US$536.6 million, versus Q3 2019’s US$447.1 million.

In the same update, the company also said it expects results for the rest of the financial year ‘to be good’, barring any unforeseen circumstances.

As a result, Wilmar’s board of directors also announced that a special dividend, of approximately 15% of the total initial public offering proceeds from its Chinese subsidiary Yihai Kerry Arawana Holdings’ successful listing, will be declared in 2021.

Details of the special dividend will be disclosed in the upcoming financial results.

Wilmar’s shares are down 0.36% as at 13:20 SGT on Monday.

Oversea-Chinese Banking Corporation (SGX: O39)

Oversea-Chinese Banking Corporation (OCBC) is due to report its fourth quarter and full-year results for the 2020 financial year before the market opens on Wednesday (24 February 2021).

Group net profit for the third quarter of 2020 of S$1.03 billion was 41% higher as compared to S$730 million in the previous quarter, largely driven by a fall in allowances.

Singapore’s second largest money lender’s operating profit before allowances was S$1.59 billion, down 5% quarter-on-quarter. Total income declined 3% from the previous quarter to S$2.54 billion. Net interest income was 4% lower at S$1.42 billion, as a result of lower market rates which drove a six basis points contraction in net interest margin.

Group CEO, Samuel Tsien, said in the update: ‘While 3Q20 saw a recovery from the trough of the previous quarter, we may not have seen the full extent of the lagging economic impact of the crisis yet, which will have more visibility next year.’

Meanwhile, Tsien will be succeeded by Helen Wong, deputy president and head of global wholesale banking, on 15 April 2021.

OCBC shares are up 1.04% as at 13:40 SGT on Monday. Share price is up 5.44% on a year-to-date basis.

Sembcorp Industries (SGX: U96)

Sembcorp Industries will announce its fourth quarter and full-year 2020 financial results before trading hours on Tuesday (23 February 2021).

In December 2020, the energy and urban development company expects to incur losses for the full year, due to impairments of approximately S$89 million in its financial statements for the second half of 2020.

The group cited ‘the unprecedented impact of COVID-19 on the global economic outlook and the challenging market environment’ for the impairments.

However, it expects to maintain positive operating cash flow in 2020 underpinned by the underlying profitable performance of its energy and urban businesses.

In the first half of 2020, Sembcorp Industries posted a turnover of S$3.5 billion and a net loss of S$131 million. This was mainly due to losses in the marine business, and exceptional items recorded across the group.

Sembcorp Industries shares are down over 4% year-to-date. Stocks are trading at S$1.65 each on Monday, an increase of 1.23% on an intraday basis.

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