Tough year for SMEs sees average profits fall by 9%
25 February 2016 [Singapore] – Singapore’s top 1000 companies (S1000) have achieved a significant milestone with their combined revenue hitting the S$3 trillion mark.
The record revenue comes just three years after Singapore’s corporate powerhouses crossed the S$2 trillion revenue mark in 2013. The S1000 companies achieved the S$1 trillion milestone in 2007.
In other words the S1000 revenue went from S$2 trillion to S$3 trillion in half the time it took them to go from S$1 trillion to S$2 trillion.
The S1000 ranks the top 1,000 companies in Singapore by revenue and is published with the SME1000 and the Singapore International 100 (SI100). Together these rankings are a comprehensive annual audit of the performance of Singapore’s corporate sector. DP Information Group (DP Info) is the ranking body and publisher of the rankings.
Mr Lincoln Teo, Chief Operating Officer of DP Info said the S$3 trillion figure was significant as it showed the contribution large corporations make to the success of the Singapore economy.
“In today’s business world the corporations that make up the Singapore 1000 wield enormous power and continue to set the standard for other businesses to aspire to.”
“The strong performance of the Commerce-Wholesale sector shows the vital role played by external trade in Singapore’s economic development and progress, with the intensity of trade within ASEAN and Asia-Pacific continuing to dominate.”
“There are many factors which contribute to Singapore’s trading success including its open economy, world-class logistics infrastructure and its probusiness regulatory environment.”
“We are also seeing the benefits of Singapore’s network of 20 free trade agreements which have opened up opportunities for Singapore-based firms by eliminating tariffs and making it easier to move goods across international borders,” Mr Teo said.
HOW THE MILESTONE WAS ACHIEVED
The new high watermark was driven by the strong performance of the Commerce-Wholesale sector which added an additional S$413 billion in sales since 2013.
Singapore’s role in world trade helped companies in the Transport/Storage sector to increase both the number of companies in the S1000 ranking as well as their percentage contribution to the total revenue. Transport/Storage companies recorded combined sales of S$222.1 billion this year, which represents 7.39 per cent of the total S1000 revenue.
Another strong performer in recent years is Singapore’s Information and Communications (InfoComm) sector, which had S$31.9 billion in revenue in 2007, rising to S$68.2 billion in 2013 and increasing again to S$90.6 billion this year.
Manufacturing contributed 233 companies in 2007, falling to 175 in 2013 and to 146 this year. The sector’s contribution to revenue as a percentage of the total has halved since 2007.
SMALL AND MEDIUM ENTERPRISES (SME) 1000
Compared to last year’s rankings, the combined revenue of Singapore’s top 1000 SMEs rose 2.9 per cent to S$29.2 billion.
Combined profits declined by 1.6 per cent to S$3.3 billion. This was accompanied by a rise in loss making companies from 130 in 2015 to 144 this year.
The average profit of the SME1000 companies has fallen 9.1 per cent compared to last year. Finance companies recorded the largest fall in average profit (-45.9 per cent), followed by Property companies (-40.2 per cent).
Information & Communications companies had the highest increase in average profit per company (+45.1 per cent), followed by Services companies (+33.1 per cent).
Commenting on the performance of the SME1000, Mr Teo said, “Singapore’s SMEs are doing well to capture increased sales, but the real challenge is to lift their level of profitability.”
“SMEs are struggling with the high cost of doing business, in particular wages and rents. They also face growing competition from across the region.”
“In terms of average profits, the most improved group of SMEs are in the InfoComm sector. Many of these companies represent the next generation of innovative high-tech companies that could be a big part of Singapore’s future economy.”
“Disruptive technologies are shaking up the way we live our lives and how we do business, and Singapore’s InfoComm SMEs are at the forefront of this change. So it is encouraging to see their profits on the rise,” Mr Teo said.
DP CREDIT RATINGS
The vast majority of S1000 companies are financially strong with excellent credit ratings, showing they are able to achieve growth without taking unnecessary risks and without an over-reliance on debt.
There was an increase in the number of DP1-4 Investment Grade companies from 758 in 2015 to 779 in 2016. A DP1-4 rating indicates there is less than a one per cent chance the company will default on a debt.
The improvement in the S1000’s overall credit standing was caused by a significant jump in the number of companies receiving the highest possible credit rating of DP1 – up from 191 in 2015 to 209 this year. The number of companies with a ‘High Risk’ credit rating remains small with just 30 companies being rated DP7 or DP8.
The credit standing of the SME1000 companies also improved slightly with the number of DP1-4 Investment Grade rated companies increasing from 427 to 443. However, there was also an increase in the number of SMEs with a DP7-8 High Risk credit rating, from 156 last year to 171 this year.
SINGAPORE INTERNATIONAL 100 (SI100)
The overseas revenue of the top 100 internationalised companies in Singapore dipped by 8.7 per cent to S$206 billion compared to 2015.
However, when looked at over a five-year time frame, a more positive picture emerges of Singapore companies and their performance in the global market place. Since 2011:
- The revenue of the SI100 from China has more than doubled
- Revenue from SE Asia has almost doubled
- Revenue from the Americas has doubled
- Revenue from Africa has nearly tripled
ABOUT THE RANKINGS
The Singapore 1000, SME 1000 and Singapore International 100 are ranked and published by DP Information Group with EY as Co-Producer. It is supported by the Singapore Business Federation, IE Singapore, SPRING Singapore, ACRA and IDA Singapore. Official Media Partners are Channel NewsAsia, The Business Times and Fortune Times.
The key sponsors are ANZ Singapore and DHL Express Singapore.
THE 29TH SINGAPORE 1000 & SME 1000 INCORPORATING SINGAPORE INTERNATIONAL 100 AWARDS CEREMONY AND DINNER – FUTURE FANTASTIC
The 2016 S1000, SME1000 incorporating SI100 Gala Awards Dinner will be held on Friday, 26 February 2016 at The East Ballroom, Resorts World Convention Centre Sentosa. The Guest of Honour is Dr Koh Poh Koon, Minister of State for Trade and Industry.
Awards will be presented in the following categories:
- Singapore 1000 Sales/Turnover Growth Excellence (8 Industries)
- Singapore 1000 Net Profit Growth Excellence (8 Industries)
- Singapore SME 1000 Sales/Turnover Growth Excellence (8 Industries)
- Singapore SME 1000 Net Profit Growth Excellence (8 Industries)
- Singapore SME 1000 Promising SMEs (4 categories of crossing the $10 million, $20 million, $50 million and $100 million marks)
- Singapore International 100 Overseas Sales/Turnover Excellence (5 awards)
- Singapore International 100 SME Overseas Sales/Turnover Excellence (5 awards)
- ANZ-S1000 Global Growth Excellence
- DHL-SME1000 Global Growth Excellence
Appendix 1
2016 SINGAPORE 1000, SME 1000 INCORPORATING SINGAPORE INTERNATIONAL 100 AWARD RECIPIENTS
Appendix 2
2016 SINGAPORE 1000, SME 1000 INCORPORATING SINGAPORE INTERNATIONAL 100 AWARDS CRITERIA
The Singapore 1000, Singapore SME 1000 and Singapore International 100 awards are annual corporate accolades based on the financial performance of Singapore incorporated companies and small & medium enterprises (SMEs).
The Singapore 1000 recognition is annually conferred to deserving recipients who demonstrate exemplary financial performance in their field and among their peers. Awardees will also need to exhibit qualities which define them as outstanding corporate citizens.
The initial shortlist of award candidates is prequalified through their financial performance in the respective categories. Candidates must be profit-making over the ranked period. Corporations who experience gross negative growth will not be considered for an award. In addition to their financial achievement, this shortlist is then further judged on a set of criteria which demonstrates the company’s commendable corporate citizenry standards.
In particular, the Steering Committee will also examine factors, including but not exclusive, of the following:
- The profile of the shareholdership and the ultimate shareholders;
- The nature of the company’s core business in relation to their financial performance;
- Any recent/currently reported information that affects the standing of the company; &
- Adherence to corporate governance standards, detailed as follows:
Apart from financial indicators such as Sales/Turnover, Net Profit After Tax and Return on Equity, regulatory compliance is a key evaluation criterion in the awards nomination process for the Singapore 1000 Family of Awards (since 2011). Transparency and accountability are critical components of good corporate governance. The criterion for regulatory compliance takes reference from the rating of companies under the Accounting and Corporate Regulatory Authority’s (ACRA) colour coded compliance rating. The criterion encompasses three important statutory requirements under the Companies’ Act: the timely holding of the Annual General Meeting or AGM (section 175); laying of up-to-date financial statements at the AGM (section 201); and the timely filing of the Annual Returns (section 197). The corporate governance criterion adds an important dimension to the awards as good corporate governance ensures that the business environment is fair and transparent and leads to sustainable business performance.
Companies that have received the award in the same category for 3 consecutive years will not be considered for the subsequent 2 awarding years. Instead, such companies will be conferred with the honorary award for the first year.
The screening process is undertaken by the Awards Steering Committee consisting of representatives from DP Information Group, EY, Singapore Business Federation, IE Singapore, SPRING Singapore, ACRA and IDA Singapore.
The steering committee must concur, by majority, on the most deserving candidates for the particular recognition of the Singapore 1000, Singapore SME 1000 or Singapore International 100 award.
Appendix 3
ABOUT DP INFORMATION GROUP
DP Information Group (DP Info) is Singapore’s leading provider of information, analysis and intelligence on the Singapore corporate sector. The company is part of Experian, one of the world’s largest credit reference agencies.
With an unparalleled database on the performance of Singapore companies and access to the world’s best analytical services, DP Info uncovers the meaning and significance in data and gives its customers the knowledge they need to make better business decisions.
DP Info offers a range of powerful tools for assessing the credit worthiness and financial health of both companies and individuals. The company also specialises in providing knowledge to, and intelligence on Singapore’s SME community.
DP Info’s services and activities include:
- QuestNet – An online information portal used by 98% of Singapore’s financial institutions and leading law firms
- DP Credit Ratings – a proprietary credit rating model that reliably predicts the probability of company default
- DP SME Commercial Credit Bureau – a member-based platform where the payment records of each member’s clients and suppliers are shared
- DP Bureau – Singapore’s one-stop business advisory centre for entrepreneurs and business owners
- DP Credit Bureau – a consumer credit bureau which analyses the credit records of millions of Singaporeans to assist financial institutions make lending decisions
- The Singapore 1000 Family of Awards – Singapore’s most prestigious definitive corporate awards, honouring the nation’s best performing companies
DP Info is an ISO/IEC 27001 Information Security & Data Management certified company.
For more information, visit www.dpgroup.com.sg
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