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Oceanus Group (SGX:579) Shareholders Will Want The ROCE Trajectory To Continue

Simply Wall St · 2d ago

Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics. Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. With that in mind, we've noticed some promising trends at Oceanus Group (SGX:579) so let's look a bit deeper.

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Return On Capital Employed (ROCE): What Is It?

If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. To calculate this metric for Oceanus Group, this is the formula:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)

0.082 = S$5.3m ÷ (S$174m - S$109m) (Based on the trailing twelve months to June 2025).

So, Oceanus Group has an ROCE of 8.2%. Ultimately, that's a low return and it under-performs the Food industry average of 14%.

Check out our latest analysis for Oceanus Group

roce
SGX:579 Return on Capital Employed December 15th 2025

Historical performance is a great place to start when researching a stock so above you can see the gauge for Oceanus Group's ROCE against it's prior returns. If you're interested in investigating Oceanus Group's past further, check out this free graph covering Oceanus Group's past earnings, revenue and cash flow.

So How Is Oceanus Group's ROCE Trending?

We're delighted to see that Oceanus Group is reaping rewards from its investments and is now generating some pre-tax profits. The company was generating losses five years ago, but now it's earning 8.2% which is a sight for sore eyes. And unsurprisingly, like most companies trying to break into the black, Oceanus Group is utilizing 133% more capital than it was five years ago. This can tell us that the company has plenty of reinvestment opportunities that are able to generate higher returns.

For the record though, there was a noticeable increase in the company's current liabilities over the period, so we would attribute some of the ROCE growth to that. The current liabilities has increased to 63% of total assets, so the business is now more funded by the likes of its suppliers or short-term creditors. Given it's pretty high ratio, we'd remind investors that having current liabilities at those levels can bring about some risks in certain businesses.

The Key Takeaway

Long story short, we're delighted to see that Oceanus Group's reinvestment activities have paid off and the company is now profitable. Although the company may be facing some issues elsewhere since the stock has plunged 85% in the last five years. Still, it's worth doing some further research to see if the trends will continue into the future.

Oceanus Group does come with some risks though, we found 4 warning signs in our investment analysis, and 2 of those are a bit concerning...

While Oceanus Group isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets.