Hiap Tong's Earnings Mask Hidden Problems: Unusual Items and Accrual Ratio Indicate Shaky Financial Health.

Hiap Tong's (Catalist:5PO) recent earnings report has soft headline numbers, but its stock has performed positively. The company's accrual ratio of -0.16 indicates that its free cash flow exceeded its statutory profit. However, unusual items worth S$787k boosted its profit in the last twelve months, which may be a one-off occurrence. Investors should also consider balance sheet strength when evaluating the company.

Hiap Tong (Catalist:5PO), a company listed on the Singapore Exchange, has recently released its full-year 2025 earnings report, revealing mixed financial performance. The company's revenue stood at S$91.9 million, which is flat compared to the previous fiscal year (FY 2024). The net income, however, decreased by 25% to S$3.10 million, leading to a profit margin of 3.4%, down from 4.5% in FY 2024. The earnings per share (EPS) also declined to S$0.01 from S$0.013 in FY 2024 [1].

Despite the soft headline numbers, Hiap Tong's stock has performed positively, rising by 15% from a week ago. This performance can be attributed to the company's strong free cash flow, indicated by an accrual ratio of -0.16, which suggests that the company's free cash flow exceeded its statutory profit. However, it is essential to note that unusual items worth S$787k boosted the profit in the last twelve months, which may be a one-off occurrence [1].

Investors should also consider the company's balance sheet strength. While the earnings report does not provide detailed balance sheet information, a strong balance sheet can provide a cushion against economic downturns and help the company sustain its operations.

Delta Air Lines, on the other hand, has reinstated its full-year 2025 earnings guidance, becoming one of the first major US corporations to resume forward-looking financial projections amid ongoing economic uncertainty. The company now expects earnings per share (EPS) between US$5.25 and US$6.25 and free cash flow between US$3 billion and US$4 billion [2].

The airline industry, including Delta Air Lines, has been responding to the challenging demand environment with capacity adjustments and new revenue strategies. Delta plans to keep capacity flat during the second half of 2025, while Southwest Airlines expects a slight increase in capacity and plans to introduce basic economy fares, baggage fees, and extra-legroom seating later this year.

In conclusion, while Hiap Tong's earnings report shows mixed results, the company's stock performance and strong free cash flow indicate potential growth opportunities. Investors should continue to monitor the company's financial performance and consider the broader economic and industry trends when evaluating Hiap Tong's prospects.

References:
[1] https://finance.yahoo.com/news/hiap-tong-full-2025-earnings-231641726.html
[2] https://mexicobusiness.news/aerospace/news/delta-restores-2025-outlook-eyes-us4-billion-free-cash-flow?tag=aerospace