Singapore Corporate News - 15 Jan 2008

SPH posts 1.3% rise in Q1 net profit to $111.9m

SINGAPORE Press Holdings (SPH) yesterday reported a 1.3 per cent year-on-year rise in net profit to $111.9 million for its first quarter ended Nov 30, 2007.

The profit rise was despite a 66.9 per cent fall in investment income from $29.7 million to $9.8 million. Earnings per share came to seven cents.

Profit before investment income - which reflects the recurring earnings of the media and property businesses - surged 19.8 per cent to $126.5 million from $105.6 million a year ago, boosted by its newspaper and magazine businesses and profit contribution from its Sky@eleven condominium project.

Group operating revenue grew 14.7 per cent to $312.1 million. Revenue from newspaper and magazine operations rose 8.2 per cent to $261.3 million, underpinned by strong print advertisement revenue growth of 10.5 per cent to $202.9 million. Revenue from property rose 69.9 per cent to $43.5 million, with a contribution of $16.1 million from Sky@eleven.

The drop in investment income was due partly to the fair valuation of investments being affected by recent volatility in financial markets. In addition, the previous year's investment income was boosted by higher dividend income from telco MobileOne and profit from a capital reduction exercise by telco StarHub.

SPH's investment portfolio comprises mainly equities and bonds. BT understands that the portfolio does not have direct exposure to US sub-prime mortgages.

In the latest quarter, total operating costs increased 11.8 per cent to $188.5 million.

Property development cost for Sky@eleven accounted for $4.6 million, while staff costs were 14.7 per cent higher due to higher variable bonus provision in line with continued improved profitability of the newspaper business, increased headcount and annual salary increment.

Total headcount in November last year was 3,771, up from 3,562 a year ago, mainly due to the inclusion of new subsidiaries and staffing for new media businesses. Other operating expenses of $41.3 million were up 12.8 per cent, with increased business activity and costs for new subsidiaries.

SPH said that recurring earnings this financial year are expected to be satisfactory. 'Advertisement revenue will continue to be driven by the Singapore economy, which is expected to grow at a more moderate pace in 2008,' said chief executive Alan Chan. 'The group will continue to focus on sustaining its operating profit margin amid rising business costs. Profit from Sky@eleven will provide an added boost to earnings. Barring unforeseen circumstances, the directors expect the recurring earnings for the current financial year to be satisfactory.'

SPH shares closed unchanged yesterday at $4.60.

Qian Hu Q4 earnings surge 81.6%

KICKING off the results season, ornamental fish breeder Qian Hu yesterday announced an 81.6 per cent year-on-year surge in fourth-quarter net profit to $1.58 million.

The net profit for the three months ended Dec 31, 2007, translated to earnings per share of 0.39 cent, up from 0.25 previously. Revenue for the 2007 final quarter rose 18.9 per cent to $24.6 million.

The Q4 results raised full-year net profit to $4.95 million, up 89.1 per cent as turnover grew 20.5 per cent to $91.7 million. Full-year earnings per share came to 1.34 cent, up from 0.74.

The group's Q4 results were boosted by a 42.4 per cent jump in operating profit to $2.32 million from its ornamental fish segment. This was helped particularly by the strong margins from the sale of Dragon Fish.

Operating profit for its accessories saw a jump in Q4 to $614,000 from $55,000 for the previous corresponding quarter. This came as the group explored untapped overseas markets. The plastics segment registered a 33 per cent fall in operating profit to $130,000 due to slight erosion in profit margin as a result of higher raw material (resins) prices.

Qian Hu executive chairman and managing director Kenny Yap said: 'Going forward, we expect our accessories business to contribute to a faster pace of growth in profit margin.'

Mr Yap cited the growing demand for its products as well as the anticipated shift of its associate Arcadia's production of aquarium lighting products to Qian Hu's Guangzhou plant later this year.

Qian Hu had agreed in July to acquire a 20 per cent stake in Arcadia, a UK-based manufacturer of aquarium lamps, for an initial consideration of $813,000.

Mr Yap added that the company will continue to expand overseas and targeted more distribution points in China, as well as more export markets for its accessories business by tapping Arcadia's distribution network, which spans 55 countries.

Qian Hu held cash and cash equivalents of $5.5 million at the end of the last year, which was flat year-on-year. The amount of cash generated from operating activities fell but was balanced by an increase in cash generated from financing activities as employees cashed in share options.

No final dividend was declared. In September last year, Qian Hu paid a special interim dividend of 8.54 cents per share, less tax.

Its stock eased half a cent yesterday to 18 cents.

Pacific Shipping Trust sees 15% rise in fleet value

PACIFIC Shipping Trust's (PST) current portfolio of eight ships has been valued at US$287 million. This is 15 per cent higher than the book value and nearly 6 per cent higher than the total purchase price.

The valuation was done by Singapore-based independent broker Team Shipbrokers and was conducted on a charter-free basis. The eight vessels in Pacific's current portfolio had a book value of US$249 million as at Dec 31, 2007, and their total purchase price was listed as US$271 million at the trust's initial public offering in May 2006.

'The rise in our asset values reflects the strong demand for quality container ships in 2007, when both new building and second-hand vessels were sold at record prices,' said PST Management chief executive Subhangshu Dutt. 'We hope this valuation dispels the concerns among some investors that ships only depreciate in value.

'As trustee manager of PST, we are committed to maximising value for unitholders by providing a high, stable yield that comes from a diversified portfolio of quality, well maintained assets,' he added.

PST will keep to its accounting policy of not revising the book values of its vessels.

PST also announced yesterday the launch of a new 1,800 TEU (twenty-foot equivalent) vessel. The US$43 million vessel is being built at China's Dalian Shipbuilding Industry (Group) Co and is due for delivery at end-March.

The vessel will be Singapore-flagged and bareboat-chartered to PST sponsor Pacific International Lines (PIL) for eight years. In bareboat charters, the shipowner provides only the ship. The charterer has complete control over the management and operation of the vessel for an agreed leasing period and pays all operating costs including crew stores and bunker.

The Kota Nabil's sister vessel, another 1,800 TEU container ship costing US$43 million, will be delivered to PST by end-May. These two ships are expected to raise the shipping trust's total contracted revenue per annum by 15.7 per cent to about US$61.9 million.

Last September, PST announced the acquisition of two 4,250 TEU ships from PIL which it will time-charter to leading South American liner shipping company CSAV. With the latest two new vessels, PST's portfolio will expand by half from eight to 12 vessels by the end of the year.

'The early delivery of this vessel will mean that our unit-holders will realise the yield accretion promptly,' said Mr Dutt. And he assured unit-holders that 'we are continually on the lookout for more acquisitions which are yield accretive and which can diversify our charterer base'.

Holcim pays US$3.8m for 50% stake in ecoWise unit

WASTE management company ecoWise Holdings has formed a joint venture with Holcim (Singapore), a wholly-owned subsidiary of cement, crushed stone, gravel and sand supplier Holcim.

Holcim Singapore will pay US$3.8 million for a 50 per cent stake in ecoWise Materials, which is wholly owned by ecoWise Holdings.

ecoWise will receive a one-off gain from the cash injection, which will help it to maintain and operate a plant to recycle and process used copper slag.

Holcim will take the 'exclusive off-take' of ecoWise's processed copper slag, which is used in ready-mix concrete as an alternative to sand, said ecoWise chairman and chief executive Lee Thiam Seng.

ecoWise is a collector of used copper slag from shipyards and docks in Singapore.

Mr Lee said the joint venture company, to be renamed Geocycle Singapore, will also 'set up a research and development facility to develop new sustainable sources of alternative fuels and raw materials' used to manufacture cement and other building materials.

Any new alternative fuels and raw materials that result from the R&D initiative will also be taken up by Holcim.

Holcim, listed on the Swiss Exchange, recorded sales of more than 23 billion Swiss francs (S$30.1 billion) in 2006.

It holds majority and minority interests in companies in more than 70 countries worldwide, and was recognised as 'the leader in the industry' in the Dow Jones Sustainability Index 2006.

Ellipsiz's profit warning

SINGAPORE microchip equipment maker Ellipsiz said on Sunday it expects significantly lower profits for the six months to December 2007, compared to the $10.9 million it earned in the same period a year ago, due to a sharp drop in chip prices. 'The first six months of 2007 saw a sharp decline in the average selling price for semiconductor chips due to intense competition, pricing pressure and inventory issues. This situation continued into the second half of 2007,' the company said in a filing to the Singapore Exchange.

Ellipsiz said its margins and profits were further impacted by higher costs from the weakening of the US dollar, and the restructuring of its distribution and services business, but said it expected to remain profitable for the period. The company had reported a net profit of $15 million for the full year to end-June 2007, a 42 per cent drop year-on-year. It will announce its results for the six months to December 2007 on Feb 14.

ICT entrepreneurs can tap $2.3m SingTel scheme

BUDDING infocomm technology (ICT) entrepreneurs can now tap a new free resource to help turn their ideas into commercial reality.

Launched yesterday, the $2.3 million SingTel Partner Programme will provide eligible developers with equipment that they can use for developing and testing their nascent applications at no charge. Free training and consultancy, as well as discounted voice and data packages are also part of the deal, according to SingTel.

These resources will be housed at SingTel's new innovation centre at its Exeter Road ComCentre building.

In conjunction, SingTel has created a new Web portal to serve the developers.

SingTel's announcement comes at a time when the Singapore government is encouraging local entrepreneurship activities, especially among start-ups and academia.

Infocomm Development Authority of Singapore (IDA) chief executive officer Rear Admiral Ronnie Tay gave the thumbs-up to the new programme at the launch. 'For local infocomm companies, they can generate their own intellectual property in products and services which will serve them well in the global market,' he said.

He also urged other operators to create similar initiatives in partnerships with the industry, saying that IDA will be 'most happy' to support their initiatives.

The SingTel Partner Programme is partly funded by IDA, while a group of seven vendors chipped in with equipment and other resources. They are Forum Nokia, HTC, Microsoft, Motorola, Nokia Siemens Networks, Research in Motion (RIM) and Sony Ericsson.

CEO of SingTel Singapore, Allen Lew, said that a collaborative environment will create a better development climate. 'By bringing together the key stakeholders like IDA, handset manufacturers and the entrepreneurial community, SingTel facilitates an ecosystem.'

For developers, the no-strings-attached aspect of SingTel's scheme will be a further enticement. According to SingTel, developers are not obliged to partner with SingTel when their ideas bloom into commercial reality. They can even choose to partner other operators.

'We believe that this will be a win-win situation for all, so it need not be a handcuffing type of deal,' said Ong Geok Chwee, director of business development, Business Marketing Division, Business Group, SingTel.

She added that this is the first time SingTel has solicited developers this way. A SingTel partner engagement is usually done in a more formal process like via a tender.

Hoe Leong to buy 60% of Supreme Energy

HOE Leong Corp is acquiring shares in Supreme Energy Pte Ltd (SEPL), a company engaged in owning, chartering and managing offshore equipment. The company will invest US$600,000 for 60 per cent of SEPL, which is in the process of acquiring a steel flat top deck cargo barge for conversion into a floating mud plant barge for drilling and other offshore projects. Hoe Leong has also agreed to grant SEPL an interest-free bridging loan of US$593,750, secured by a mortgage over the barge, which is presently valued at US$3 million. The company will appoint three directors to SEPL's board, which will have five members.

Jets Technics net loss widens to HK$13.7m

JETS Technics International Holdings yesterday declared a net loss of HK$13.7 million (S$2.5 million) for the six months ended Nov 30, 2007 - a widening of the net loss of HK$6.0 million seen for the corresponding six months in 2006. The greater loss was due to lower sales and higher raw materials and operating costs, the company said. Turnover for the first half fell to HK$36.9 million, a drop of 3.2 per cent from the HK$38.1 million recorded a year ago. This was mainly due to the amount of contracts completed.