For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine Samudera Shipping Line Ltd’s (SGX:S56) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers. Check out our latest analysis for Samudera Shipping Line
How S56 fared against its long-term earnings performance and its industry
For the most up-to-date info, I use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This method allows me to examine various companies on a more comparable basis, using new information. For Samudera Shipping Line, its latest earnings is -$4.7M, which compared to the prior year’s level, has become less negative. Given that these values may be relatively short-term, I’ve created an annualized five-year figure for Samudera Shipping Line’s earnings, which stands at $5.1M.
Additionally, we can assess Samudera Shipping Line’s loss by looking at what has been happening in the industry as well as within the company. Firstly, I want to briefly look into the line items. Revenue growth over the last couple of years has been negative at -8.13%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Eyeballing growth from a sector-level, the SG shipping industry has been enduring some headwinds in the past year, leading to an average earnings drop of -23.55%. This is a significant change, given that the industry has constantly been delivering a a strong growth of 17.11% in the past couple of years. This suggests that even though Samudera Shipping Line is presently loss-making, any recent headwind the industry is facing, the impact on Samudera Shipping Line has been softer relative to its peers.
What does this mean?
Samudera Shipping Line’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that incur net loss is always difficult to envisage what will occur going forward, and when. The most insightful step is to examine company-specific issues Samudera Shipping Line may be facing and whether management guidance has regularly been met in the past. I recommend you continue to research Samudera Shipping Line to get a better picture of the stock by looking at:
1. Financial Health: Is S56’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.