By TEH SHI NING

(SINGAPORE) The first disbursements under the Jobs Credit scheme have made their mark on the earnings of listed companies for the quarter ended March. But analysts say the scheme's overall impact on the bottom line, while welcome, has been modest compared to that of companies' own cost management schemes.

ST Index heavyweights like ComfortDelgro, SMRT Corporation, SIA Engineering, ST Engineering, SingTel, StarHub, OCBC and UOB all noted the contribution made by the government grants in their quarterly results reports, either as an 'other income' item or under 'operating expenses' on their profit & loss (P&L) statements for the quarter ended March 31.

'The Jobs Credit scheme certainly helped but only very marginally,' said CIMB-GK research head Kenneth Ng. 'Measures like headcount control, reined-in salary increases, more stringent management of business promotion costs and staff travelling costs helped in a bigger way,' he said.

OCBC Investment Research head Carmen Lee too said: 'In general, we noted a trend of declining cost-to-income ratio, but this could be due to a combination of several factors including lower operating expenses, lower commodities prices, cost containment exercises, and also partly from job credits.'

This could explain why, as Ms Lee observed, most listed companies did not specify the Jobs Credit scheme's impact on their P&Ls, though many would have received payouts under the first payment tranche of $920 million, paid out to over 100,000 employers on March 31.

The scheme gives businesses a tax-exempt grant of 12 per cent of the first $2,500 of the monthly salary of each resident worker on their CPF payroll, up to $300 a month for each worker. Hence, the level of salaries paid to employees influences the scheme's impact too.

For example, Mr Ng said, for one of the banks, annualised cost savings of $20 million would amount to less than 2 per cent of annual staff costs. But, companies 'with a greater proportion of lower-wage workers' see a more significant boost.

SATS, for instance, received a Jobs Credit grant of $12.3 million, which helped trim staff costs by 9.7 per cent. SATS, whose operating profit grew 35.2 per cent from a year ago, also said that 'eliminating the impact of the Jobs Credit scheme, operating profit would have remained flat'.

Most companies which made mention of the grant registered it among factors that helped defray staff costs, or mitigate a rise in operating expenses. These included MobileOne, SingPost and Banyan Tree Holdings.

Of those who did specify the precise sum received under the scheme, SingTel and ST Engineering reported receipts of $9 million and $9.4 million respectively.

Smaller players such as Soil Build Holdings received $185,000, while Middle East Development Singapore received $30,636. Wee Hur Holdings and SMB United both said that the grant boosted operating income.

The Jobs Credit scheme is aimed at reducing employers' real wage costs, so as to curb potential retrenchments. Citi economist Kit Wei Zheng estimates that Jobs Credit will reduce employers' wage bills by an average of 6 per cent per worker across industries, assuming constant employment.

NTU economist Randolph Tan has estimated that the Jobs Credit scheme will have its largest impact in the second quarter and could save 40,000 jobs this year.

This article was first published in The Business Times.