SPEECH
PLEASE CHECK AGAINST DELIVERY
Speech by Ms Chen Yew Nah
Managing Director
DP Information Group
Singapore 1000 & SME 500 2006 Media Conference
Tuesday 17 January 2006
1
Ladies and Gentlemen,
2
Thank you for attending this morning’s media briefing on the 2006
Singapore 1000 and SME 500 rankings and awards.
3
Over the last 12 months, DP Information Group has analysed the
audited results of more than 7,000 companies, tracking them with
their financial year ending from 1st June 2004 to 31st May 2005,
operating in Singapore to arrive at the final lists and the award
winners.
4
The result is an honour roll of the most successful companies in
Singapore – from large multinational corporations recognised
throughout the world, to home grown SME success stories.
5
But the results do more than just provide a list of winners in each
of the award categories.
The Singapore 1000 and SME 500
provides us with a clear picture of how Singapore’s business sector
is performing. It tells us which industries are enjoying growth, and
which are facing difficult times.
Ranked & Published by
Page 1 of 7
6
And by comparing the results to previous years, we can identify the
trends, challenges and changes that Singapore’s companies will
encounter over the next 12 months.
NEW FEATURES
7
This year we have added several new innovations to the rankings
to provide even greater information and insight into the workings of
the Singapore economy.
8
For the first time, we have compiled a separate ranking based on
profits.
We can now compare the top revenue generating
companies with the top profit making companies for both the
Singapore 1000 and the SME 500.
9
Another new feature is a ranking of all the companies that have
been publicly listed in Singapore for two or more years, so
comparisons can be made between the performance of our listed
companies and the wider business sector.
10
These two new features highlight how DP Information Group and
our partner organisations are committed to making the Singapore
1000 and SME 500 rankings the most comprehensive and relevant
analyses ever undertaken of Singapore’s corporate sector.
RECORD PROFITS
11
I would now like to share with you some of the insights and trends
we have identified this year.
12
I am pleased to report that this year’s results are the most
encouraging we have seen in several years.
13
The standout results are the huge leap in profitability of both the
Singapore 1000 and the SME 500 companies. Both have recorded
record profits over the last 12 months.
Page 2 of 7
Ranked & Published by
14
The Singapore 1000 companies have seen their combined profits
leap by 30.5% from $46.7 billion to $61.0 billion this year. This is
on the back of an increase in combined turnover of 19.1% - from
$773.1 billion in 2005 to $920.5 billion in 2006.
15
As a result, we have seen an increase in profitable companies
making this year’s Singapore 1000 list – up from 873 in 2005 to
912 in 2006.
16
Not to be outdone, our SMEs have also enjoyed strong sales growth
and robust profits this year.
17
The SME500 companies have increased their absolute profits by
36.1% - from $427.6 million to $582.2 million this year.
18
The combined SME500 turnover rose from $12.0 billion to $13.5
billion – a healthy increase of 12.6% compared to last year.
19
Similarly, the number of profitable companies on the SME500 list
also rose from 395 to 421.
20
The bottom line is more companies are making more sales and
generating more profit indicating Singapore’s business sector is on
track for a period of sustained growth.
21
The results are also consistent with the Government’s own
economic data which showed a resurgence in the second and third
quarters of 2005.
HOW THE INDUSTRIES PERFORMED
22
In
understanding
how
these
strong
economic
results
were
achieved, it is important to look at each of the major industry
sectors and how they performed over the preceding 12 months.
Page 3 of 7
Ranked & Published by
23
The S1000 shows that nearly every industry has recorded stronger
results in terms of both turnover and profit.
24
The most noticeable exceptions are the Property and Holdings
sectors which managed to increase their absolute profits while
recording a decline in combined turnover.
25
The reverse applies to the Manufacturing and Services sectors
which recorded increased sales but a lower level of absolute profit.
26
The S1000 Communication/Transport/Storage sector maintained its
growth momentum of previous years to record an impressive
35.8% increase in profits compared to last year, based on a 22.1%
increase in sales.
27
The SME500 companies in the Communication/Transport/Storage
sector also enjoyed strong results with profits up by 101.7% on
turnover growth of 24.8%.
28
The S1000 Manufacturing sector has shown strong sales growth of
15.4% this year. However profits have dipped by 8.4%, reflecting
growing international competition and its effect on profit margins.
29
The
SME500
Manufacturing
firms
outperformed
their
larger
counterparts on all counts: profits rose by 54.5%, sales grew by
40.7% while the number of Manufacturing companies that made
the SME500 list rose from 73 to 90.
30
The S1000 Finance sector recorded solid results with a 64.0%
increase in profits on a 10.6% increase in sales. SME500 Finance
firms were among the most profitable, with a 100.5% increase in
profits based on a modest 5.6% increase in sales.
Ranked & Published by
Page 4 of 7
PUBLICLY LISTED COMPANIES
31
As I mentioned earlier, this year’s publication features several new
features, one of which is a ranking of companies that have been
publicly listed for two years or more in Singapore.
32
This new ranking allows a comparison of the performance between
publicly listed companies (PLCs), S1000 (Sales) companies and
SMEs.
33
When the profit margin of each group is compared, PLCs clearly
shine, with an average profit margin of 13.7% - one-and-a-half
times that of S1000 companies (9.2%) and easily twice that of
SMEs (6.4%).
34
There may be several reasons for this result: first, S1000
companies include many multinational trading companies such as
oil/gas and trading companies which generate high levels of
turnover and lower margins;
35
Second, larger companies can achieve economies of scale when
compared to SMEs; and
36
Third, the transparency and corporate governance of PLCs may
attract
and
require
a
different
calibre of
management
and
shareholders’ objectives.
DP CREDIT RATINGS
37
As in previous years, DP Information Group has performed an
assessment of the credit worthiness of each of the ranked
companies using the DP Credit Rating.
Ranked & Published by
Page 5 of 7
38
The DP Credit Rating methodology is based on the global credit
ratings model developed by Moody’s KMV - the world’s leading
provider of quantitative credit analysis tools. This methodology has
proven - over time and through many case studies - to be more
predictive and robust than any other risk rating.
39
The strengthening performance of Singapore’s economy is reflected
in the improved credit worthiness of both S1000 and SME500
companies.
40
The percentage of S1000 companies awarded DP1-4 (Investment
Grade) credit ratings rose to 57.6% up from 54.5% last year.
Similarly, the percentage of SME500 companies that received DP14 (Investment Grade) rating increased from 24.2% in 2005 to
26.4% in 2006.
NEW RANKING BY PROFIT
41
This year’s Singapore 1000 and SME500 rankings include a new
feature – a ranking of companies based on profits in addition to the
ranking based on sales.
42
This new S1000 and SME500 (Profit) rankings has revealed an
additional 375 corporations and 195 SMES worthy of recognition
and award.
43
The new dual ranking by profit and sales have captured hundreds
of large companies and SMES that would not otherwise have been
recognised.
These newly uncovered ‘corporate gems’ are among
the most profitable and best managed companies in Singapore and
deserve to be recognised for their achievements.
44
The new S1000 (Profit) and SME500 (Profit) rankings show how
profitability has a strong correlation with credit worthiness. A high
Ranked & Published by
Page 6 of 7
70.6% of the S1000 (Profit) companies received a DP1-4 rating as
did 33.4% of the SME500 (Profit) companies.
THE AWARD WINNERS
45
It is now time to announce the 37 companies that have been
chosen from among the 7,000 assessed companies to receive the
awards.
46
But before I ask my fellow panelists to announce the winners, it is
important to acknowledge the many partner organisations that
have contributed to this year’s Singapore 1000 and SME 500
rankings and awards.
47
First, I would also like to thank Ernst and Young Singapore who
have been our partner and Co-Producer of this publication for the
last nine years.
And I also thank the supporting organisations
SPRING Singapore, IE Singapore and the The Business Times.
48
Equally, I would like to thank HSBC who are the principal sponsor
of the awards and the Gala Night Event. Their support is just one
way in which HSBC is demonstrating its ongoing commitment to
Singapore and the Singapore business community.
49
I would now like to introduce Mr Simon Yeo, Partner at Ernst &
Young, to announce the winners of the Singapore 1000 Awards for
Highest Turnover and Highest Percentage Turnover Growth.
50
He will be followed by Mr Thian Tai Chew of IE Singapore who will
announce the Singapore 1000 Net Profit Award and by Mr Gwee
Seng Kwong of SPRING Singapore who will announce the SME 500
winners.
51
Thank you.
Page 7 of 7
Ranked & Published by