Singapore Corporate News - 24 Jul 2007

M1 posts 10% rise in Q2 net profit to $40.6 million

MOBILEONE (M1) yesterday reported a 10 per cent year-on-year rise in second-quarter net profit to $40.6 million. This brought its first-half net earnings up 10.3 per cent to $90.3 million, 70 per cent of which the telco has proposed to return to shareholders through a dividend and a capital reduction.

The $40.6 million Q2 net profit translates to earnings per share (EPS) of 4.3 cents, up 16.2 per cent from 3.7 cents a year ago.

In a conference call yesterday evening, M1 chief executive Neil Montefiore attributed the better performance to higher revenues from increased data usage, as well as lower corporate taxes.

Q2 revenue grew 4 per cent to $199.8 million, helped by average revenue per post-paid user rising to $62.20 from $60.40 a year ago. This was driven by an increase in data usage by its post-paid customers, said Mr Montefiore. For H1, revenue rose 3.5 per cent to $396.2 million.

The company also brightened its outlook for the year by raising its profit forecast for the current financial year from stable to single-digit growth.

M1 proposed an interim dividend of 2.5 cents per share, and a cash distribution - by way of a capital reduction without any share cancellation - of 4.6 cents per share. Together, this will amount to 70 per cent of first-half net profit.

Mr Montefiore added that while M1's wireless broadband service still constitutes a small portion of its customer base, it now has some 42,000 customers on the service, most of whom are on its $38 per month plan.

M1 added some 31,000 subscribers in the quarter, bringing its customer base to 1.409 million subscribers or about 28 per cent of the local market.

M1's capex was $17.4 million in the first half of the current financial year, up from the $8 million spent in the same period last year. This was largely spent on its wireless broadband devices, said Mr Montefiore.

He added that with the growth seen in data usage, M1 is now evaluating technologies that will enable it to provide more of its own backhaul requirements.

'Currently, we spend about $30 million per year on leased circuits that are not provided by ourselves,' he said. This accounts for some 80-90 per cent of its backhaul requirement, most of which is leased from SingTel. M1 intends to reverse this, and by 2010 plans to have 80-90 per cent of its backhaul requirements self-provisioned.

M1 shares closed the day down 3 cents at $2.13. Shares of competitors StarHub lost 4 cents to finish at $2.86, while SingTel ended unchanged at $3.50.

Qian Hu's Q2 profit climbs 94.4%

ORNAMENTAL fish service provider Qian Hu Corporation has reported a 94.4 per cent jump in second-quarter net profit to $1.16 million, with sales rising 22.6 per cent to $22.42 million.

Earnings per share (EPS) for the three months ended June 30, 2007 rose to 0.9 cent from 0.47 cent for the previous corresponding quarter.

Its Q2 gross profit margin slipped slightly from 37.7 per cent to 36.4 per cent but what helped were general and administrative expenses climbing by just 10.9 per cent from $4.57 million to $5.07 million, a dip in taxation, and minority interests rising by just 8.6 per cent to $430,000.

On a six-month basis, its net profit leapt 88.4 per cent to $2.1 million, while revenue grew 21.9 per cent to $44.41 million. EPS for the half-year period was 1.63 cents - up from 0.87 cent a year earlier.

During the quarter, it reported stronger performance in all business divisions, particularly in its ornamental fish business which saw operating profit rising 39.7 per cent to $2.13 million in line with the higher revenue recorded and better margins from its self-bred Dragon Fish.

As for its accessories business, Qian Hu said it has revived the business margin back to a respectable level. The Q2 operating profit from this division was up 21.3 per cent at $484,000.

'In addition, with more manufacturing orders secured, we managed to further enhance the operational efficiency of our Guangzhou factory, which has lifted the profitability of our accessories business as compared to the corresponding period in 2006,' it said in a statement.

Operating profit in its plastics activities also posted steady Q2 growth of 24.2 per cent to reach $190,000.

Qian Hu intends to grow its export of ornamental fish by expanding its customer base and geographical footprint. The firm exports ornamental fish to more than 70 countries through its distribution hubs in Singapore, Malaysia, Thailand and China.

There are plans to raise the export of aquarium and pet accessories such as its proprietary 'Ocean Free' products which are sold to the Philippines, Brunei, Australia, New Zealand, Japan, Turkey.

It believes that the market for pets such as dogs, cats and small animals will continue to grow globally. Part of its plans includes growing its distribution network for pet accessories by leveraging on Qian Hu's house brands.

The company had earlier bought a 20 per cent stake in Arcadia Products PLC, a UK manufacturer of aquarium lamps to propel its business growth in Europe.

Qian Hu sees higher production from its Guangzhou factory, driven mainly by the increasing orders for its manufactured products as well as the transfer of Arcadia production facilities from the UK by next year. 'In anticipation of such increase, it is essential for the group to enhance its production efficiency and to further strengthen its R&D capabilities,' Qian Hu said.

The stake in Arcadia will also significantly strengthen its R&D efforts in developing and improving its aquarium accessories products, it added.

Last month, Qian Hu announced a special interim cash dividend of a net seven cents per share. It also proposed a rights cum warrant issue.

Advanced Hldgs' H1 net more than trebles to $4m

ADVANCED Holdings has announced a strong first-half performance, with net profit more than trebling.

Net profit for the six months ended June 30, 2007, surged to $4 million from $1.16 million for the corresponding period last year. Earnings per share rose to 1.55 cents from 0.46 cent. The earnings jump came as revenue rose almost three-fold from $10.4 million to $30.97 million.

Advanced, a designer and provider of process equipment for the oil & gas, petrochemical and power industries, declared an interim one-tier dividend of 0.5 cent per share, double the 0.25 cent in the previous corresponding half.

'We achieved triple-digit growth in revenue and profit amidst the buoyancy in the global oil & gas and petrochemical sectors. It is worth noting that in the first half of this year alone, we have exceeded our full year performance in FY06,' said Kar Wong, managing director and founder.

Advanced has secured more than $41.7 million worth of contracts so far this year. As at June 30, its order book stood at about $79 million.

Extensive regional expansion has seen Advanced consolidate its presence in markets such as China, which accounted for almost 60 per cent of the company's total revenue.

Recent successful entry into the Middle East has also seen the region playing an increasing role in the company's operations, contributing $6.8 million to total revenue. Operations in Singapore contributed $1.6 million, a 42.1 per cent increase from the corresponding period last year.

The company has announced that it is looking to strengthen its presence in other regional markets such as Vietnam and Thailand, with entry into other global markets also in the pipeline.
'We have strengthened our technological capabilities with the acquisition of US-based speciality process analyser company GWI. We will forge ahead with plans for strategic alliances with leading technology partners and to grow our global footprint into USA, Europe, South America and India,' said Dr Wong.

Advanced is also looking to diversify its operations to include clean energy equipment and technologies.