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THE local stock market may be enjoying a rally, but it was a vastly different picture for corporate Singapore's earnings in the first half of the year.
Most listed companies here bore the full brunt of the global recession, which was at its most brutal during the six-month period.
Better times seem to lie ahead, though.
Analysts are tipping that the worst is over for hard-hit bottom lines, with many issuing upgrades in their latest forecasts.
Another indication that things are heading in the right direction: Many firms recorded double-digit growth in the second quarter against their first-quarter results.
Still, the numbers for the first half as a whole make for grim reading.
As of 5pm yesterday, the profits of 387 Singapore-listed firms whose half-year ended on June 30 totalled $10.44 billion. That is 50 per cent down on the $20.88 billion made in the same period last year.
In contrast, the half-year profits of 411 Singapore-listed firms totalled $20.37 billion last year, up 6.2 per cent on the $19.18 billion notched up in the same period in 2007.
Yesterday was the 45-day deadline for firms to report second-quarter results. A total of 73 companies turned from making profits to posting losses.
However, DBS Vickers research head Janice Chua said: 'The worst is over, we have seen the first signs of upgrades in May, and this round, upgrades are across the board.'
There was also a marked improvement in the second quarter over the first, said Mr Gabriel Yap, senior dealing director at DMG & Partners Securities.
He told The Straits Times: 'An analysis of most companies shows a quarter- on-quarter improvement of about 20 per cent, which does provide a good margin of safety to suggest that the worst was seen in the first quarter in terms of corporate profitability.'
This was also reflected in the economic growth data, which showed a 20.7 per cent rise in the second quarter over the first quarter's figure.
CIMB-GK research head Kenneth Ng attributed the turnaround in second-quarter earnings to the Government's Budget stimulus measures taking effect and confidence returning.
Palm oil-related companies impressed, with Wilmar International topping the charts.
Other plantation firms also bettered expectations, posting brighter second-quarter numbers over the first three months' results.
Taking second spot was Keppel Corp, which posted its best quarterly results in the second quarter. The oil rig maker also saw first-half net profits soaring past
$1 billion due to exceptional gains.
The three local banks took up the other slots in the top five.
DMG Research analyst Leng Seng Choon noted that the banks' second-quarter earnings were generally above expectations, with lower-than-expected provisioning being a critical contributing factor.
He added: 'While the improving economy will be positive for banks' earnings going ahead, we remain cautious that a slow economic recovery could lead to banks having to make more provisions ahead to maintain their loan loss coverage.'
One notable absentee from the 10 biggest earners was CapitaLand, which posted its first quarterly red ink in six years in the second quarter due to revaluation losses.
Analysts expect the third and fourth quarters to be significant for property companies because of the soaring sales of new residential units seen in the first half of the year.
The developers have also started to be bullish about their prospects, with several talking of speeding up launches and introducing new projects in the next few months and the final quarter.
Overall, analysts expect a better second half, in line with the economic recovery. For instance, Ms Chua has revised her earnings forecast for this year from -22 per cent to -20 per cent.
Mr Yap said: 'A turnaround is in place, but do not expect the 2010 jump in earnings vis-a-vis 2009 to be great.'
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