UOB-Kay Hian Q4 profit up 7.4 per cent

SINGAPORE - Stockbroker UOB-Kay Hian Holdings chalked up a 7.4 per cent rise in fourth-quarter net profit to $19.2 million.

Revenue for the three months to Dec 31 last year rose by 1.4 per cent to $102.7 million.

While market volumes rose significantly in Hong Kong and Thailand, the volume in the group's main market in Singapore continued to be flat.

The increase in commissions from those two markets partially offset the decrease in Singapore.

The group recorded a decrease of 6.5 per cent in commission income to $59 million.

Interest income rose from $25.2 million to $32.5 million with higher lending activity. But other operating income declined by 34 per cent to $8.1 million on the back of less corporate finance activity.

Total costs and expenses fell 3.3 per cent to $79.8 million.

Commissions paid to commission agents increased by 12.7 per cent to $15.3 million as their contribution to commission income was proportionately higher.

Personnel expenses, which included incentives paid to employed dealers, fell 26.7 per cent to $30.1 million, in line with lower brokerage from this channel.

Full-year earnings fell 20.3 per cent to $74.4 million on the back of a 13.4 per cent drop in revenue to $369.6 million.

Commission income fell 19.7 per cent to $234.7 million. Interest income grew by 12.6 per cent to $99.9 million, with more financing activity.

Other operating income fell 26.6 per cent to $26.7 million because of a decrease in corporate finance and related activity.

Total costs and expenses fell 10.4 per cent to $280.4 million, in line with lower business volumes, while commission and personnel expenses shrank 20.5 per cent to $55.5 million and 16 per cent to $113.9 million, respectively, with lower commission income. Finance expenses rose 18.8 per cent to $36.8 million mainly because of higher lending activity.

Quarterly earnings per share rose to 2.56 cents from 2.47 cents previously, while net asset value per share climbed by 5.54 cents to 163.96 cents.

A first and final dividend of five cents a share was recommended, down from 6.5 cents last year.

The stockbroker noted that global market sentiments remain cautious, with concerns over the geopolitical and macroeconomic nature. "We expect subdued conditions in Asia for at least the first half of this year," it said.

Given that regional stock prices, especially for companies exposed to the oil and gas, property and commodities sectors, are at historically low valuations, any improvement in investor sentiment could spur transactions volumes.

UOB-Kay Hian is hopeful this could occur in the second half of the year.


This article was first published on Feb 18, 2015.
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