Chart of the Day: Listed companies struggle as profits head south

Overall corporate earnings weakened in 2015.

Public companies in Singapore have reported weaker profitability on back of escalating global headwinds, according to a report by the Monetaty Authority of Singapore.

The median return of assets (ROA) of listed companies edged down from 3.9% in Q2 2014 to 3.5% in Q2 2015.

ROA serves as a measure of how profitable a company is relative to its total assets. The indicator illustrates how efficient a company’s management is at using its assets to generate earnings.

In particular, trade-related sectors registered larger ROA declines. The manufacturing sector ROA fell to 1.5% in the second quarter from 3.2% in the same period last year, on back of persistently weak global demand.

Meanwhile ROA for the TSC sector (3.3%) was weighed down by excess capacity in the shipping sub-sector. 

The number of companies wound up increased from 76 in H1 2014 to 97 in H1 2015 (a 28% increase), but remained below the long-run average of 113.

“Overall corporate profitability has dipped as headwinds in the domestic and external environment weighed on business outlook and earnings,” the MAS said.