Beneficiary of current high oil price environment Singapore Petroleum Company (SPC) has seen its earnings grow by leaps and bounds in the current high oil price environment, from loss-making in FY01 to a net profit of S$508.4m in FY07. While earnings may continue to be highly variable because of volatile refining margins, this will be progressively augmented by its upstream earnings.
Attractive dividend yield of 9.0% SPC has been rewarding shareholders during in its current purple patch, having paid out over 60% of earnings in the last two financial years. We expect SPC to stick to this payout level, which would result in a DPS of 63 cts per share in FY08. Dividend yield is a very attractive 9%.
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