As the earnings season rolls on, investors are keeping their eyes peeled on their stocks’ financial results and management commentary.

Many wish to find out if the current inflationary environment, along with surging interest rates, will have any adverse impact on bottom lines.

Blue-chip stocks are not immune to these headwinds.

However, some of these businesses are in a better position to withstand these challenges because of the nature of their business.

Here are three Singapore blue-chip stocks that are slated to announce earnings.

We delve deeper into certain aspects of their results that investors should look out for.

DBS Group (SGX: D05)

DBS needs no introduction, being Singapore’s largest bank by market capitalisation.

The lender is on a roll with its first half of 2023 (1H 2023) earnings seeing a record high net profit of S$5.2 billion.

The group also raised its quarterly dividend by 33% year on year to S$0.48 per share.

Surging interest rates benefitted the bank’s net interest income (NII) and net interest margin (NIM), with the latter jumping from 1.52% in the first half of 2022 to 2.14% in 1H 2023.

DBS is slated to release its third quarter 2023 results on 6 November.

Investors will be closely scrutinising DBS’s NIM as the US Federal Reserve has communicated its intention to hold interest rates higher for longer.

Apart from the NIM, all eyes will also be on the bank’s loan growth.

CEO Piyush Gupta expects low-single-digit loan growth for the full year but 1H 2023 saw customer loans decline by 2% year on year to S$415.7 billion.

Fee income growth will also be in the spotlight as further upside from increased card spending could translate into higher card fees for the lender.

Elsewhere, wealth management fees could also receive a boost as 1H 2023 saw net new inflows of S$12 billion.

Finally, investors will monitor DBS’s provision levels to assess if the current high-interest rate environment may be causing financial stress, leading to borrowers being slow or unable to service their loans.

Story continues

Singapore Airlines Limited (SGX: C6L)

Singapore Airlines Limited, or SIA, is Singapore’s flagship carrier.

With borders reopening and air travel returning with a vengeance, SIA reported a stellar set of financial and operating results for the first quarter of fiscal 2024 (1Q FY2024) ending 30 June 2023.

Net profit for the quarter nearly doubled year on year to S$734 million and was SIA’s highest quarterly net profit on record.

Passenger load factor also hit a record high of 88.9% as many people rushed to book holidays after being cooped up for nearly three years.

However, the airline may be facing headwinds ahead as it prepares to report its fiscal 2024 first half (1H FY2024) results on 7 November.

Fuel costs could surge as oil prices surge to their highest level in a year back in September 2023.

SIA’s passenger numbers have also come down from July 2023 after surpassing the three million mark, hitting 2.9 million back in September.

This suggests air travel demand may be stabilising after enjoying an initial surge as borders reopened, with the year-on-year increase declining sharply from 389% in January 2023 to just 36% in September.

The carrier also warned in 1Q FY2024 that competition is expected to intensify in the coming months with more capacity injected into international routes.

Hence, price competition may result in lower fares and load factor for the airline.

CapitaLand Investment Limited (SGX: 9CI)

CapitaLand Investment Limited, or CLI, is a real estate investment manager with total assets under management (AUM) of S$134 billion as of 30 June 2023 along with S$89 billion of property funds under management (FUM).

CLI reported healthy growth for its AUM and FUM when it released its 1H 2023 earnings.

Investors will be curious to know if CLI managed to accelerate its AUM and FUM growth in the third quarter of 2023 (3Q 2023).

The property group’s 3Q 2023 business update will be released on 9 November 2023 before the market opens.

Many will also be watching out for progress on growing the group’s fee-related earnings, with a particular focus on recurring fee-related earnings.

With higher spending on holidays and travel, investors will also be curious to see how CLI’s lodging division performs.

Finally, CLI is expected to provide an update on its capital recycling activities as it moves towards an asset-light business model.

Investors will be interested to see the group’s progress on both investments and divestments.

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Disclosure: Royston Yang owns shares of DBS Group.

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