Singapore Corporate News - 15 Aug 2007

Hyflux posts 51% higher Q2 earnings

BUOYED by higher industrial sales with the completion of more projects, Hyflux Ltd enjoyed a 51 per cent lift in net profit from a year ago to $4.53 million for the second quarter ended June 30.

The membrane technologies specialist, which announced its financial results yesterday, separately said it has secured three water treatment projects in China worth 305 million yuan (S$60.7 million). For the second quarter, despite a 23 per cent year-on-year jump in industrial sales to $34.4 million, revenue grew only 3 per cent year-on-year to $38.76 million. The main dampener came from a 57 per cent slump in municipal sales to $3.5 million, with the full elimination of the engineering, procurement, construction (EPC) revenue under SinoSpring Utility Ltd after Hyflux raised its stake in the subsidiary from 50 per cent to 80 per cent in July last year.

China continues to be a key growth driver for the group, accounting for 77 per cent of the group revenue in the second quarter.

The three new projects announced yesterday brought the total number of build-operate-own/build-own-transfer (BOO/BOT) projects in China to 25.

Of the three new projects, Hyflux's wholly owned unit Newspring Utility Pte Ltd (NUPL) will operate an existing 30,000 cubic metres per day waste water treatment plant for 30 years and undertake the design, engineering and construction of a new plant with a production capacity of 30,000 cubic metres per day in Mancheng County in Hebei province. It has also been granted two 25-year exclusive concessions to design, construct, operate and maintain a 30,000 cubic metres per day potable water treatment plant and a 20,000 cubic metres per day waste water treatment plant in Jiawang, Xuzhou City in Jiangsu province.

Another of Hyflux's wholly owned unit, Hyflux Utility (YK) Ltd, has been granted a 30-year exclusive concession to design, construct, build, operate and maintain a waste water treatment plant with a treatment capacity of 20,000 cubic metres per day in Yangkou, Rudong County, Jiangsu Province. 'Over the last three years, we have greatly strengthened our fundamentals and our competitive position as you can see from our strong order book position and that we continue to win projects among all the competitive players in the market in China,' Ms Olivia Lum, group CEO and president, said in a results briefing yesterday.

To date, Hyflux is sitting on an order book of $827 million, of which $325 million are projects in Algeria that are expected to start steaming into its bottom line in the fiscal year 2008. The order book also includes some $400 million of EPC projects under SinoSpring, which Hyflux could start recognising effective from Jan 1 next year as it adopts a new accounting treatment on BOT projects.

But Hyflux's first half of this year was less promising. Its net profit was almost halved from a year ago level to $5.77 million amid a 27 per cent dip in revenue to $52.11 million as municipal sales and industrial sales declined.

Industrial sales were 7 per cent lower during the first six months of this year than a year ago at $43.1 million due to a lead time between new contracts signed and execution and delivery of these new projects as well as the absence of technology licence fees, while municipal sales fell for the same reasons as in the second quarter.

Going forward, Hyflux said it is keen to stay with its asset-light strategy via a business trust, with the likelihood of injecting its completed projects in China.

Wilmar Q2 profits soar 142.4% to US$39.55m

WILMAR International's net profits have more than doubled - a 142.4 per cent increase - to US$39.55 million in the second quarter of this year, the agribusiness group announced yesterday.

The robust performance comes on the back of higher sales volume and palm oil prices, better processing margins as well as a one-month contribution from new plantation and refinery subsidiaries, courtesy of a recent merger with PPB Oil Palms Berhad and PGEO Group Sdn Bhd.

Revenue rose by 83.6 per cent from US$1.29 billion in second quarter 2006 to US$2.36 billion this second quarter. Net profit for the half-year ended June 30 rose 105 per cent to US$65.58 million while half-year revenue surged 64.1 per cent from US$2.37 billion to US$3.9 billion.

Earnings per share were 2.47 US cents for the first half ended June 2007, up from 1.47 US cents in the first half of 2006.

On June 28, Wilmar completed a merger worth US$2.7 billion with Kuok Group's palm plantation, edible oils, grains and related businesses which consists of PPB Oil Palms Berhad, PGEO Group Sdn Bhd and Kuok Oils & Grains Pte Ltd.

The merchandising and refinery segment, which accounted for the biggest contribution to the company, earned an 85.1 per cent increase in revenue in the second quarter from US$1.27 billion to US$2.36 billion. Demand for palm and laurics was driven primarily by China, India, Russia, Ukraine and the Middle East.

The plantations and palm oil mills saw 115.9 per cent revenue growth to US$173.29 million for the second quarter, as a result of higher selling prices. Crude palm oil prices were up around 65 per cent for the first half of 2007 year-on-year. Revenue from miscellaneous businesses such as ship chartering and fertilisers, saw an increase in revenue to US$55.23 million for the second quarter, up by 26.4 per cent.

SingTel beats forecasts with 10.4% Q1 profit rise

Singapore Telecommunications yesterday posted a 10.4 per cent gain in net profit to $927 million for its first quarter ended June 30, boosted by unprecedented double digit growth at home as the resurgent economy led to more mobile phone sales and higher business demand.

The strong performance led to an upward rerating. Revenue from the Singapore business is now expected to see high single digit growth, from the previous low single digit forecast, while capital expenditure to support the increased business is expected to rise at a low double-digit rate rather than the previously forecast single digit rate, SingTel chief executive Chua Sock Koong said at a media presentation of the group's results.

SingTel's net profit of $927 million easily beat the $894 million average forecast of four analysts polled by Reuters.

South-east Asia's largest telco said that group operating revenue for the quarter rose an impressive 11 per cent to $3.57 billion compared to a year ago on the back of a 10 per cent revenue growth from its Singapore operations.

Revenues also got a lift from a stronger Australian dollar, up 7 per cent from a year ago. Optus, the SingTel unit which is the second largest telco in Australia, reported a 3.5 per cent increase in revenues to A$1.9 billion (S$2.4 billion). In Singapore dollar terms, there was an 11 per cent increase.

SingTel's regional associates continued to deliver spectacular profit growth, with pretax profit up 51 per cent to $652 million.

SingTel's data and Internet sales were up 13 per cent to $335 million. Mobile phone sales rose 14 per cent to $317 million as the company added 124,000 new subscribers, of which 108,000 were prepaid customers, reflecting SingTel's increasing market share among foreign workers.

Overall mobile subscribers rose to 1.92 million giving the company a 39 per cent market share, up one percentage point from a year ago.

Broadband subscriptions increased to 438,000, a gain of 66,000. SingTel's share of the Internet market was 53.7 per cent, down from 54.1 per cent a year ago.

Its IT or NCS revenue rose 12 per cent to $151 million on the back of higher contribution from systems integration and product resale. NCS order books remain strong, the company said. During the quarter, it clinched a number of government contracts in Qatar, China and Hong Kong. In Singapore NCS continued to win jobs from government agencies.

At Optus, operational Ebitda - earnings before interest, tax, depreciation and amortisation - were stable at A$481 million with operational Ebitda margin down to 25.4 per cent from 26.1 per cent a year ago.

Earnings from SingTel's regional associates on a post-tax basis increased 29 per cent to $463 million, contributing 53 per cent of the group's underlying net profit, up from 48 per cent a year ago. Year-on-year the group's combined mobile subscriber base ballooned 48 per cent to 136 million, the largest in Asia outside China.

Group operating expenses rose 12 per cent to $661 million. Free cash flow for the quarter was up 21 per cent to $556 million.

YHI set to sponsor F1 team

WHEEL-MAKER YHI International has become the first Singapore company to formalise a Formula One (F1) sponsorship.

The home-grown group, led by former racing ace Richard Tay, will supply its own Avanti rims to an F1 team for the 2008 season. The team's identity can be revealed only next year.

Besides the sponsorship fee, YHI will supply 200 Avanti rims to the team. Mr Tay said the sponsorship was a way for YHI to counter rising competition and 'strengthen the brand value'.

He said Chinese manufacturers have begun to make their presence felt and 'it's not possible to compete with them on price'. The rising cost of raw materials has been squeezing margins 'as we can't pass the cost increase entirely to the consumer because of competition'.

YHI incurred a 41.66 per cent fall in second-quarter net profits to $6.4 million and a 27.5 per cent drop in half-year earnings to $11.6 million.

This was because the profit for the six-month period last year was bolstered by a goodwill increment of $5.4 million from taking a stake in Italian rim-maker OZ SpA. But even without this payment, this year's interim profit would have been only 8.4 per cent higher, despite sales more than doubling to 1.3 million rims.

Second-quarter revenue rose 6.4 per cent to $108.5 million and was up 3.4 per cent at $204.5 million for the half-year. Earnings per share for the second quarter was 1.1 cents, down from 1.88 cents. Net asset value was 26.57 cents, up from 25.33 cents as at Dec 31.

Mr Tay said YHI will continue its overseas thrust, having already invested more than US$70 million in 52 countries.