SGX posts 44% increase in Q2 net to $156.4m
SINGAPORE Exchange (SGX) reported a 43.9 per cent surge in net profit to $156.4 million for the second quarter ended Dec 31, helped by strong performance across its revenue streams and the receipt of a one-time distribution.
Its Q2 operating revenue jumped 63 per cent to $203.54 million, while earnings per share were 14.75 cents - up from 10.32 cents a year earlier.
Excluding a one-off distribution of $34 million from the SGX-DT Compensation Fund, its after-tax net profit was $122.4 million, compared with the previous corresponding period's $108.7 million. The latter included a $45 million write-back of allowance for impairment on SGX Centre.
For the first half of the year, net income, including the one-time $34 million distribution, came to $286.4 million, 83.2 per cent up from the previous corresponding half-year's $156.4 million. Operating revenue stood at $423.22 million, up 85 per cent.
Under its securities market segment, Q2 securities- related processing fees rose 63.8 per cent, while securities clearing fees went up by 98.2 per cent. Access fees also posted strong growth, and overall Q2 revenue for the segment rose to $122 million from $64.1 million previously.
Net derivatives clearing revenue jumped 40.4 per cent in Q2 to $38.6 million as a result of higher futures trading volume and increase in structured warrants trading value.
During the quarter, SGX saw listing fees go up by 52.1 per cent, while terminal & connection fees rose 69.5 per cent. In all, the exchange reported a stable revenue of $43 million - up from $33.3 million a year earlier.
Operating expenses increased at a comparatively lower rate of 25.4 per cent to $60.8 million.
The increase was mainly due to increases in variable bonus provision, rental of premises and staff costs.
For example, cost of rental and maintenance more than trebled to $4.14 million, while staff costs went up 18.5 per cent to reach $15 million. Variable bonus (including CPF) rose 36.1 per cent to $14 million. The business raked in $149.76 million of operating cashflow in Q2, bringing its cash and cash equivalents to $521 million as at Dec 31.
At a briefing yesterday, reporters were told that SGX's Asian Gateway strategy had brought in 43 per cent, or $182 million, of the company's first half revenue.
Of this, the securities section - including foreign listings, cross-borders Reits and exchange-traded funds - contributed some $106 million or 25 per cent of its total turnover - up from 21 per cent previously. On a quarter-on-quarter basis, however, the number of foreign initial public offers dipped slightly from 17 in Q108 to 15 in Q2.
A number of initiatives continue to bode well for SGX's prospects.
These include the launch of Catalist, a sponsor-supervised listing platform for fast-growing firms that replaced the Sesdaq board, and reduced minimum size bids to improve trading efficiency and market liquidity.
'With the launch of Catalist, we expect to attract more fast-growing companies from the region. Along with other key initiatives that we have put in place, SGX is focused on our growth as an Asian Gateway,' said chief executive officer Hsieh Fu Hua.
Mr Hsieh said that the launch of the revamped STI and new indices should stimulate the development of more index-related products and 'these, together with the planned introduction of our new trading engine in July' will set the stage for more algorithmic trading here.
SGX declared a dividend of three cents per share, tax exempt one-tier for Q2. Yesterday, its shares closed 76 cents lower at $10.
CapitaLand, NUS sell Hitachi Tower
CAPITALAND has sold its 50 per cent stake in Hitachi Tower for $403.5 million, the property giant said yesterday.
Upon the deal's completion, CapitaLand will recognise a gain of $110.1 million, it said.
The National University of Singapore, which owns the remaining 50 per cent of the Collyer Quay office building, also sold its stake.
The deal took into consideration the agreed value of the 999-year leasehold Hitachi Tower at $811 million, or about $2,900 per square foot (psf) of net lettable area. The consideration was arrived at on a willing-buyer willing-seller basis, CapitaLand said.
The developer did not name the buyer in its filing to the Singapore Exchange, but sources said that the building was bought by a fund linked to Goldman Sachs.
Goldman Sachs bought the next-door Chevron House, formerly known as Caltex House, for $2,780 psf in August last year. Chevron House is on a site that had a remaining lease of 81 years at the time of the transaction.
The 37-storey Hitachi Tower has a net lettable area of around 279,600 square feet. The building had close to 100 per cent occupancy as at Dec 31, 2007, and key tenants include Hitachi Asia and American Express.
Market watchers have said that it makes sense for Goldman to own two adjoining office blocks as it can take advantage of managing them together, as well as look into the possibility of redeveloping both properties collectively.
A Goldman Sachs real estate fund also bought DBS Towers 1 and 2 on Shenton Way in November 2005 for $690 million, or around $800 psf of net lettable area.
Based on CapitaLand's unaudited financial statements for the nine months ended Sept 30, 2007, the group's earnings per share would have increased from 74.4 cents to 78.3 cents assuming that the sale was effected on Jan 1, 2007, the company said.
CapitaLand's shares shed 13 cents to close at a one-year low of $5.62 yesterday amid a broad fall in the Singapore stock market. The company's stock price has dropped some 10.4 per cent since the start of the year.
OCBC may set up bank in Vietnam
OVERSEA-CHINESE Banking Corp, Singapore's third-biggest bank, yesterday said that it may set up a fully-owned banking unit in Vietnam to take advantage of the country's growing financial services industry.
'We see significant growth opportunities in Vietnam's financial services sector, given the country's large population of 83 million and high GDP growth,' Linus Goh, the bank's head of international operations told Reuters in a statement.
'To increase our options for growth in the market, we may establish a 100 per cent owned subsidiary in Vietnam,' he added.
OCBC currently owns a 10 per cent stake in Vietnam's VP Bank, which it plans to increase, he said.
QCT distributable income tops RM19m
QUILL Capita Trust (QCT) - a real estate investment trust (Reit) partnership between Singapore's CapitaLand and Malaysia's Quill Group - has delivered a distributable income of RM19.27 million (S$8.5 million) for the financial year ended Dec 31, 2007, 34.5 per cent higher than its year-ago forecast.
At the initial public offering stage in December 2006, the forecast distributable income was RM14.32 million.
Over the past year, QCT has also doubled its asset size to nearly RM585 million, aided in part by a revaluation increase of RM57 million.
Its manager, Quill Capita Management, expects the property fund's assets to further grow to RM750 million by the end of this year. Already, the purchase of three office buildings worth RM94.5 million is expected to be completed by April, with another two buildings in the pipeline.
The Reit's distribution per unit (DPU) is 6.46 sen, 7.7 per cent higher than its IPO forecast of 6 sen.
QCT chief executive Chan Say Yeong attributed the year-old Reit's strong performance to its 'proactive acquisition strategy', which has made it 'one of the fastest growing commercial Reits in the country'. Its net asset value has risen to RM1.20 from 80 sen at its listing.
The three new buildings to be acquired would return yields of 6 per cent- plus and add another 203,600 sq ft of net lettable area, taking its total to slightly over one million sq ft.
Mr Chan said QCT had worked over the past year at geographical diversification of its assets so they are not all concentrated in the IT town of Cyberjaya, as was the case a year ago. The tenancy mix has also been widened, with multinational clients still forming the bulk of tenants.
QCT wants to have 70 to 80 per cent of its portfolio of assets located in the Klang Valley by year end, and the balance in other places in Malaysia, including Cyberjaya.
Observers say that one of the Reit's most attractive points is its strong pipeline of commercial buildings which can be injected into the Reit given the active involvement in the sector of its two main sponsors, the Quill Group and CapitaLand.
Because its gearing has been kept a low 0.15 times - versus an allowed 0.5 times - loans for future acquisitions of its preferred assets - offices, retail, business technology parks, and other yield accretive commercial assets - would not be a problem.
'Taking into consideration the capital appreciation of QCT units to-date and the distributable income for the year, unitholders now enjoy a total return in excess of 60 per cent in just one year,' Mr Chan said.
Still, Malaysia's high withholding tax of 27 per cent on foreign Reit unitholders has been a disincentive for foreign investors despite the strong yields, and is a point Reit owners are hoping would be addressed in the coming national Budget.
QCT's remaining 2.47 sen DPU is expected to be paid next month, the interim 3.99 sen having been paid in September last year.
ASL wins $96m of shipbuilding contracts
MARINE company ASL Marine Holdings secured contracts worth a total of $96 million to build seven vessels.
The orders are for two emergency response and rescue vessels, one water injection dredger and four rotor tugs with 80-tonnes of bollard pull capability.
The emergency response and rescue vessels and water injection dredger are expected to be completed in 2009. Three of the four tugs are expected to be completed in 2011, with the fourth due in 2012. All the contracts are from existing European clients.
Revenue from the contracts will be recognised over the contract period on a percentage of completion basis. The contracts are not expected to have a material impact on ASL's net tangible assets or earnings per share for the financial year ending June 30.
'These vessels will be built at our Singapore shipyard,' said ASL managing director Ang Kok Tian.
'The group has been expanding and upgrading its capacity and capabilities to build more sophisticated vessels where requirements for quality, statutory compliance and safety are extremely stringent. Our hard work has been rewarded with higher value contracts from our customers.'
ASL had a record shipbuilding order book of $622 million at June 30 last year. FY2007 ship-repair revenue surged 87 per cent from the previous year to $43.48 million. This was led by the enhancement of berthing capacity in Batam, where the group was constructing a 150,000 tonne dry dock.
Besides shipbuilding and repair, ASL is involved in ship chartering. It owns shipyards in Singapore, Batam, Indonesia and Guangdong, China.
'ASL Marine has successfully established itself as a niche builder for specialised vessels in the European market,' said Mr Ang. Most orders come from repeat customers confident of the quality they can expect.
ASL shares closed 11 cents lower at $1.24 yesterday.
Asia Water wins 59m yuan nuclear project
ASIA Water Technology said it has secured its third nuclear power plant treatment project worth 59 million yuan (S$11.65 million) in Dalian City in Liaoning province, which will also be the first nuclear plant in China to use advanced saltwater desalination technology based on the double membrane process.
This plant will start operations by the fourth quarter of 2009 with an initial power generating capacity of 4,000 megawatts - the largest nuclear power plant in China with such capacity in a single phase.
This marks its third nuclear power plant water treatment project, following one project in Shenzhen and another in Qinshan.
Asia Water said it expects this project to have a positive impact on its revenue for the fiscal year ending Dec 31, 2008 and 2009.
'We believe that the demand for nuclear power as an alternative source of energy is expected to grow in China, underpinned by a rapidly growing economy,' said Asia Water CEO Huang Hanguang.
Mr Huang said he believes the group's portfolio of nuclear projects will enable it to secure more power plant projects in the PRC and overseas.
In the 11th five-year plan of China's National Development and Reform Commission (NDRC) in 2005, the Chinese government made known its plan to increase nuclear power generation capacity from 8.7 gigawatts currently to 40 gigawatts by 2020. This translates to 30 new reactors in addition to the existing nine reactors that are in operation.
Separately, the China-based water treatment specialist announced that it is also investing 70 million yuan in a new wastewater treatment project in Dongxihu district of Wuhan City in Hubei.
The group's wholly owned unit Asia Water Investments (AWI), together with government-owned Wuhan City Dongxihu District Development Investment Co, will form a 70-30 joint venture called Wuhan Dongxihu Kaidi Waste Water Management Co (Wuhan Dongxihu) with a registered capital of 100 million yuan to undertake the project.
This build-operate-transfer (BOT) contract will involve the construction of a 101 sq km drainage network that links several key commercial, industrial and agricultural areas in Wuhan Dongxihu district. The wastewater collected by Wuhan Dongxihu will be treated by Asia Water's associated company, Wuhan Hanxi Waste Water Treatment Co (Wuhan Hanxi).
Wuhan Dongxihu has been granted an exclusive licence to manage the project for 25 years, including the construction period of about 18 months.
After funding this project from its first series bond issue, Asia Water will still be left with US$11.9 million, which it intends to use for internal restructuring efforts, working capital requirements and future water projects.
Mr Huang noted that given growing emphasis by the Chinese government on the environment, more water treatment projects are likely to be outsourced to private firms to speed up the growth of water treatment in major cities.
'We aim to build a strong portfolio of BOT/BOO (build- own-operate) projects that will generate a steady revenue stream and deliver value to our shareholders,' he added.
Going forward, the group is looking to participate in seawater desalination projects in China and to secure more municipal wastewater projects particularly in Hubei, Zhejiang, Guangdong and Shanxi.
The group is slated to announce its full-year results by end-February. Mr Huang said it is expected to report a stronger second half compared with the seasonally weaker first half. But it is unclear how the group will perform compared with a year ago given the elimination of inter-company revenue and costs in accordance with 'FRS 27 - Consolidated & Separate Financial Statements'.
In first half 2007, the group's revenue declined by 15.2 per cent year-on-year to 145.21 million yuan as revenues from projects subcontracted to wholly owned unit Wuhan Kaidi Water and its subsidiary companies were eliminated upon consolidation of the group account.
Welcome them home at Keppel Bay on Saturday
A GRAND homecoming is planned for the Uniquely Singapore Clipper at Keppel's new Marina at Keppel Bay on Saturday. The home boat crossed the finish line off Batam, Indonesia in seventh place around 1pm Singapore time yesterday.
There are another two Clipper yachts which have yet to finish and they are expected in some time tomorrow. All the ten boats are mustering at Batam's Nongsa Point Marina before making a ceremonial entrance as a fleet on Saturday.
The arrival of the Clipper fleet will lend colour and excitement to the opening of Singapore's newest marina on Keppel Island, which faces Keppel Land's Caribbean @ Keppel Bay and Reflections @ Keppel Bay condo developments. Senior Minister Goh Chok Tong will be present.
'Keppel is delighted to contribute to the vision and vibrancy of this southern waterfront with Marina at Keppel Bay, where premium berths and facilities stand ready to host yachts up to 200 feet and international events such as the Clipper 07/08 Round the World Yacht Race,' said Keppel Corp group corporate communications general manager Wang Look Fung.
Keppel Corp is a main sponsor of the Uniquely Singapore Clipper and has also sponsored six Keppel ambassadors as crew onboard the boat. The Singapore Tourism Board (STB) is a race partner.
'The dramatic transformations in this southern precinct, of which Keppel Bay is an integral part, will promote Singapore as a leading sailing and boating destination in Asia and we believe that with the slew of exciting waterfront developments and activities at Keppel Bay, Sentosa and the surroundings, more international yachts and boaters will be attracted to visit Singapore,' Ms Wang said.
Winnie Pua, STB's director for brand management, said: 'The international following and goodwill that the race brings will help promote Singapore's attractiveness as a leading sailing and boating destination in Asia and an ideal place in which to live, work and play.'
The boats are making a stopover in Singapore from Jan 19 to 27 as part of leg four of the 35,000-mile Clipper 07/08 Round the World Yacht Race. From Singapore, the boats will head up north to the Olympic sailing city of Qingdao in China.
The public is invited to watch the boats arriving in Singapore and also to visit the boats while they are in the marina, where they will have an opportunity to chat with the crews. The boats are due to start coming into the marina from around noon on Saturday and there are public access areas all around the promenade on Keppel Island where people can get good views.
Samudera to buy 2 bulkers from STX
SAMUDERA Shipping Line, a regional container shipping company, has entered into an agreement to purchase two bulk carriers from Korea-based STX Shipbuilding for a total consideration of US$97.6 million. The vessels will each have a carrying capacity of 57,700 dwt (deadweight tons), and are scheduled for delivery by the first half of 2011. Upon delivery, the vessels will be deployed on time-charter contracts.
Reyoung to invest in production plant
REYOUNG Pharmaceutical Holdings has announced plans to invest 32 million yuan (S$6.3 million) in a new production facility to increase output of non-penicillin based antibiotics. Occupying 4,000 sq m, the new facility will be built adjacent to the group's Shandong plant and is scheduled to be completed in June 2008. The new plant will raise the group's non-penicillin based antibiotics by 20,000 kg to 63,500 kg when it reaches full capacity in H2 2008.
Asiatic wins Cambodian deal
ASIATIC Group (Holdings) Ltd, a player in the regional energy and power industry, has secured an additional power supply contract worth about $14 million through its wholly owned subsidiary Colben System Pte Ltd in Cambodia. The additional power supply agreement will involve increasing the existing 15MW contracted capacity by another 5MW and is on top of the existing 10-year power purchase agreement entered into with Electricite Du Cambodge, a wholly state-owned company in charge of generating, transmitting and distributing electricity throughout Cambodia, in June 2005.
Ezra setting up staff incentive scheme
EZRA Holdings, an integrated support and marine services provider, said it is in the process of setting up an incentive scheme for its staff as part of concerted efforts to reward long-standing employees as well as attract fresh new talent. The group has earmarked US$10 million for the scheme, for which provisions were already made in Q1 FY2008. The move is in line with Ezra's rapid fleet expansion programme and burgeoning business activities, which have already led to an increased headcount and will entail further recruitment, it said.
Wednesday, January 16, 2008
Singapore Corporate News - 16 Dec 2008
Posted by Nigel at 7:54 PM
Labels: Singapore Corporate News
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