Singapore Corporate News - 26 Jan 2008

SMRT Q3 net profit dips 5.3%

SMRT Corp's net profit fell 5.3 per cent year-on-year to $38.3 million for the third quarter ended Dec 31, 2007, even as increased ridership, a higher average taxi hired-out fleet and rental/advertising growth pushed group revenue up.

The earnings fall was because the previous corresponding quarter included exceptional items, a key one being the inclusion of a final contribution from expired cards.

Q3 revenue rose 7.3 per cent to $202.1 million with revenue growth from all sectors. SMRT operates Singapore's biggest rail network, as well as relatively small fleets of buses and taxis.

But its other operating income dropped 69.5 per cent or about $8.5 million to $3.73 million, in the absence of the exceptional items it saw in the previous corresponding quarter.

Excluding those exceptional items, SMRT Corp said the Q3 net profit figure would have been a $5.4 million or 16.4 per cent improvement to $38.3 million.

'SMRT has delivered another set of good operating results in Q3 FY08 despite the higher operating cost environment,' said president and CEO Saw Phaik Hwa. 'We will continue to pursue opportunities to grow our revenue and at the same time manage costs in all aspects of our businesses.'

Operating profit from the group's MRT operations in Q3 rose 4.8 per cent to $33 million because of ridership growth. Staff costs were higher. Average daily ridership rose 7.8 per cent to 1.3 million from the previous corresponding quarter.

Meanwhile, Q3 operating profit from buses slumped to $15,000 from $4 million in the previous corresponding quarter because of increased diesel and staff costs, although this was partially offset by higher daily ridership.

The taxi business was back in the black in Q3 with operating profit of $500,000, compared with a loss of $600,000 in the corresponding quarter last year, thanks to a higher average hired-out rate of almost 94 per cent - up from 76.5 per cent.

As usual, rental revenue and advertising did well. Third-quarter operating profit from the rental of retail space jumped 23.4 per cent to $8 million with the redevelopment of more commercial space at various MRT stations. Operating profit from advertising on buses, trains and stations also improved 6.9 per cent to $3.6 million.

Earnings per share in Q3 fell from 2.7 cents to 2.5 cents.

For the nine months ended Dec 31, 2007, net profit attributable to equity holders rose 16.6 per cent to $115.8 million, while revenue rose 6.7 per cent to $593.6 million.

As for the Land Transport Review announcements yesterday and a week ago, SMRT says it is upbeat about the new developments to both bus and rail. It said there are more opportunities to operate and maintain a more extensive rail network, and a good opportunity to grow the bus business beyond current territories. SMRT currently runs only 800 of the 3,700 public buses in Singapore and is restricted to the northern part of the island.

Senoko incineration plant set for listing

WASTE disposal appears to be a lucrative business - going by the government's latest plan to list the Senoko incineration plant.

The government announced yesterday that it plans to divest the waste incineration plant in Woodlands - via a newly listed infrastructure business trust or fund, or to an existing listed infrastructure business trust or fund.

It says it's looking to appoint a suitably qualified fund manager to manage the infrastructure trust/ fund. It's also looking to appoint an operator to run the plant and procure incineration services from the infrastructure trust/fund.

'The key objectives of this divestment exercise are to encourage competition and further improve efficiency in the waste management sector through greater private sector involvement and also to create investment opportunities for the public to invest in the infrastructure sector,' said the joint press release by the Ministry of Finance, the Ministry of the Environment and Water Resources, and the Monetary Authority of Singapore. Built in 1992, the Senoko incineration plant is one of four waste incineration plants in Singapore, where all incinerable refuse is burnt.

The other three plants are located at in Tuas, Tuas South, and Ulu Pandan.

Land-scarce Singapore incinerates the bulk of the refuse it collects, which translates into a high volume of refuse incineration at its plants.

The government has issued a Request for Proposal - for a fund manager and an operator for the plant - which will be divided into a number of stages.

The deadline for the first stage of the tender submission is 4pm on Feb 11. Successful shortlisted parties from this stage will be invited to participate in subsequent stages.

Their proposal to float the plant comes amid JTC Corporation's plans to divest some $1.6 billion worth of its properties to a real estate investment trust (Reit). The industrial landlord is now shortlisting candidates to manage the trust, estimated to be worth about $1 billion.

Ascott's Q4 net profit triples on divestment gains

THE Ascott Group, Asia's biggest operator of serviced apartments, yesterday said that its fourth-quarter profit more than tripled on the back of divestment gains.

Net profit for the three months ended Dec 31, 2007 rose to $45.4 million from $13.6 million a year earlier. Q4 earnings per share rose to 2.8 cents, from 0.9 of a cent a year earlier.

The company is recommending a total cash dividend of six cents a share, including a bonus dividend of 4.8 cents.

Ascott's performance was boosted by the divestment of the Somerset Bayswater property in London, which gave it a net gain of $17.8 million. The company also saw some gains from the sale of a golf course in Guangzhou.

Q4 revenue rose 14 per cent to $116.5 million, from $102.1 million a year earlier, as Ascott benefited from increases in revenue per available unit and better fee-based income.

During the quarter, Ascott's property portfolio also crossed the 20,000-unit mark for the first time. The company added 3,528 units to its stable, taking the total number of serviced residence units under its management to 20,449. Ascott plans to have to have 25,000 apartments in Asia, Europe and the Gulf region by 2010.

For the whole of 2007, Ascott's net profit rose 8 per cent to $177.3 million, from $163.6 million in 2006. Revenue for the full year rose 7 per cent to $435.3 million, from $405.9 million previously.

Ascott will continue to grow its portfolio, said chief executive Jennie Chua yesterday. 'I think crossing the 20,000-mark makes us the largest owner-operator of serviced residences in the world. We will continue to grow, in the right cities and the right locations.'

Ms Chua aims to expand Ascott's presence in South-east Asia, China, India and Europe. For South-east Asia, Vietnam and the Philippines are particularly attractive, she said.

In a separate statement, Ascott said that it would invest A$136.2 million (S$170.4 million) to develop a 398-unit property in Melbourne's central business district. The investment amount includes land and building costs. The property will be Ascott's first Citadines-branded serviced residence in Australia, the company said.

Ascott's parent company, CapitaLand, made a general offer for Ascott on Jan 7 in a deal that values the serviced residence company at $2.8 billion.

CapitaLand, South-east Asia's largest property firm by market value, owns 66.5 per cent of Ascott and intends to pay up to $989.5 million - or $1.73 a share - for the remaining shares in Ascott to take the company private. Ascott's shares closed one cent lower at $1.72 yesterday.

CRCT placement snapped up

A PRIVATE placement by CapitaRetail China Trust (CRCT) was snapped up by institutional investors within half-an-hour after its launch yesterday.

Approximately 136 million new units in CRCT were fully subscribed by investors under the private placement at an issue price of $1.36 per unit, the trust's manager, CapitaRetail China Trust Management Ltd (CRCTML) said.

The total gross proceeds from the private placement amount to $185 million. The issue price was set at a discount of approximately 10 per cent to CRCT's volume-weighted average price of existing units on the Singapore Exchange on Thursday.

CapitaLand Retail Ltd, on behalf of CapitaLand Ltd and its subsidiaries, and CapitaMall Trust subscribed for approximately $74 million worth of new units so as to maintain their proportionate unit- holdings in CRCT at their pre-placement levels. The joint lead managers, bookrunners and underwriters for the private placement were Citigroup Global Markets Singapore, DBS Bank and JPMorgan.

Lim Beng Chee, CEO of CRCTML, said: 'Despite the soft and volatile market conditions, CRCT was able to raise capital and garner strong participation from investors, who had quickly subscribed for the new units within 30 minutes after the launch of the private placement. This demonstrates the resilient qualities of CRCT and the highly accretive benefits of this quality acquisition.

'We remain positive in achieving our target asset size of $3 billion by the end of 2009.'

Following the equity fund-raising for the acquisition of Xizhimen Mall and the issue price of $1.36 per new unit, unitholders can expect a distribution per unit (DPU) of 6.67 cents for FY2008, the trust manager said. This is an accretion of 4.1 per cent to the forecast DPU of 6.41 cents for CRCT's existing portfolio.

CRCT is also making a public ATM offering, in which approximately 2.2 million new units will be made available through the ATMs of DBS (including POSB) on a first-come, first-served basis at the issue price of $1.36 per new unit. The maximum number of new units per application under the ATM offering is 250,000.

The ATM offering will open at 10.30am today and close two hours later, subject to early closure if all the units under the ATM offering are fully taken up before that.

The expected date of listing of the new units is Feb 5.

Wing Tai's second-quarter net profit slips 19% to $43.6m

WING Tai Holdings yesterday reported a 19 per cent year-on-year drop in net profit to $43.6 million for its second quarter ended Dec 31, 2007, while revenue plunged 59 per cent.

Q2 sales for the property group came to $110.7 million, while earnings per share were 5.81 cents - down from 7.47 cents.

The Q2 earnings brought first-half net profit attributable to shareholders to $105.35 million, a rise of 25 per cent, even though revenue fell 52 per cent to $210.9 million. The results included a $27.5 million gain from the disposal of available-for-sale financial assets.

The company attributed the lower half-year sales to smaller contribution from the development properties division.

Revenue on development properties for the current period was mainly from the units sold in The Riverine by The Park, The Meritz and The Lakeside.

The profits recognised from these three projects contributed to its operating profit of $70.1 million - down 37 per cent from $110.5 million a year ago.

However, the company was helped by a more than three-fold jump in the share of profit of associated and joint venture companies, which lifted half-year net income.

The share of profit from associates and joint ventures rose from $23.2 million in the previous corresponding period to $75.9 million, due to the higher contributions from VisionCrest and Casa Merah projects in Singapore.

Wing Tai said that in view of volatility in the current market, it will continue to monitor the property market closely.

New residential projects for sale in the current year will be released at an opportune time.

Yesterday, Credit Suisse issued an 'underperform' on the stock, with a price target of $2.48.

The shares ended trading yesterday at $2.30 - up 6 cents from previously.

$4.4m worth of orders for Beng Kuang

BENG Kuang Marine, a service provider in the marine and offshore oil and gas industries, has secured orders worth $4.4 million from key customers.

One of the contracts, worth about $1.9 million, is for the provision of corrosion prevention services to one of SembCorp Marine unit SMOE's offshore projects - the Muda Production Platform.

Work orders secured from FACI Asia Pacific include turnkey services, engineering, fabrication and installation of process pipes and equipment on Jurong Island. This contract is worth about $1.5 million.

The third contract of about $1 million involves the supply of tools and hardware to one of Labroy Marine's subsidiaries for its rig-building projects in Batam.

'With the new contracts, there is a clear indication of our existing customers' confidence in our services and we will continue our dedication to deliver quality and timely services as we engage in active discussions for future contracts,' said managing director Chua Beng Kuang. 'Barring unforeseen circumstances, the group expects positive revenue contribution from these contracts in 2008/9,' he added.

Separately, Beng Kuang also announced the appointment of Sameer Y Khan as a non-executive director and chairman in place of Tan Boy Tee. The appointment took effect yesterday.

Inno-Pacific reports $4.66m net profit

INNO-PACIFIC Holdings yesterday reported a net profit of $4.66 million for the year ended Dec 31, 2007, up from a net loss of $1.16 million for the preceding year. Sales dipped 8 per cent to $7.17 million, while earnings per share were 0.01 cent, against a loss of 0.23 cent previously.

Dayen places out 22m shares to AO Capital

DAYEN Environmental Limited has placed out 22 million new shares to American Oriental Capital Partners (Singapore) Pte Ltd, representing a 12.9 per cent stake in Dayen. A portion of the $8.3 million generated from the placement will be used as capital to finance two of Dayen's ongoing build-operate-transfer projects in Xinmin City, Liaoning Province in China, and to finance Dayen's coal-mining venture in Indonesia.

FDS to report net loss for year ended Dec '07

FDS NETWORKS Group Ltd expects to report a net loss for the year ended Dec 2007, even though losses in the second half are expected to be substantially less than in the first six months. The company saw improvements in revenues in the second half of 2007.