Singapore Corporate News - 29 Jan 2008

SATS Q3 profit flat at $50m

SINGAPORE Airlines' subsidiary Singapore Airport Terminal Services (SATS) yesterday reported a third-quarter net profit of $50.4 million, unchanged from a year ago. Revenue for the three months ended Dec 31, 2007 rose 1.2 per cent to $244.5 million, from $241.6 million a year ago.

Q3 earnings per share came to 4.7 cents, down from 4.8 cents.

Operating expenditure rose one per cent to $197.5 million due to higher raw materials and staff costs.

The share of profits from its associated companies came in 6.5 per cent lower at $14.3 million due to lower profits from Asia Airfreight Terminal and Beijing Aviation Ground Services.

For the nine months to Dec 31, 2007, net profit dropped 2.8 per cent to $146.8 million.

All its operating indices for the quarter showed improvements over the corresponding period last year, said the company. It handled a 6.4 per cent increase in passengers, a 2.5 per cent upswing in meals produced, a 1.6 per cent growth in cargo and mail processed and a 0.1 per cent increase in flights handled.

The company says it expects business volumes in the fourth quarter to stay at the current levels, barring any unforeseen impact from the continuing global economic uncertainty.

SATS said its operations at Changi Airport Terminal 3 (T3) got off to a smooth start this month. While T3 operations will incur additional costs, the investment there is necessary to increase capacity to handle more flights and passengers passing through Changi, said SATS.

On Jan 2, the company sold Express Courier Centre 2 to DHL for $38 million, realising a net gain of $15.4 million which will be reflected in the fourth-quarter accounts.

'Going forward, we remain focused on improving productivity and service quality and will continue to seek opportunities overseas to drive our longer-term profitability,' SATS said.

SATS provides integrated ground handling and airline catering services at Singapore Changi Airport and its services include airfreight handling, passenger services, baggage handling, ramp handling, aviation security, airline linen laundry and processed food manufacturing.

Keppel T&T full-year profit up 18.8%

HELPED by a significant rise in contributions from associated companies, Keppel Telecommunications and Transportation (Keppel T&T) achieved an 18.8 per cent rise in net profit to $51.45 million for the full year ended Dec 31, 2007.

Turnover rose 10.9 per cent to $103.1 million, attributed mainly to the improved performance of its logistics arm, Keppel Logistics.

The higher profit attributable to shareholders translated to earnings per share of 9.3 cents, up 17.7 per cent.

Earnings by business segments in 2007 saw the logistics, network engineering and investments sectors register net profit of $13.11 million, $7.44 million and $30.9 million, respectively.

Net cash used in investing activities was $19.3 million compared with $27.4 million in 2006.

Keppel T&T spent $83.6 million on investments in associated companies, including the acquisition of 50 per cent of Premier Data Centres, 30 per cent of iCELL and additional shares in MobileOne.

During the year, Keppel T&T said it received $64 million from its investment in MobileOne, with $46.7 million arising from capital reduction and $17.3 million from dividends.

Keppel T&T said Premier Data Centres made its maiden contribution to the group while Annto further improved on its 2006 performance. MobileOne continued to be a major contributor with a pre-tax contribution of $36.1 million.

Keppel T&T increased its effective equity holding in MobileOne during the year to 20 per cent.

Keppel T&T recommended a first and final dividend of six cents per share tax exempt one-tier.

For the current year, Keppel T&T said that with its data centre in Dublin fully occupied, it will be sourcing new sites to increase its data centre capacity in Europe.

It also said that the domestic logistics market will moderate this year while China's domestic growth outlook remains strong and should continue to provide a good backdrop for the group's logistics operations.

Creative posts second profitable quarter in a row

THE year-end shopping season has been good for Creative Technology. The computer soundcard and MP3 device manufacturer has posted its second consecutive profitable quarter with a net income of US$7.63 million for the second quarter ended Dec 31, 2007.

This compared to a net income of US$92.1 million for the same quarter last year - a figure that was boosted by a net income of US$82 million arising from the payout by Apple Inc for the use of Creative's MP3 player patent. Excluding Apple's paid-up licence, Creative's net income was US$10.1 million for the same period last year.

On a per-share basis, the Q2 profit is 9 US cents, down from a profit of 12 US cents, excluding Apple's contribution.

Half-year income for its 2008 fiscal year is US$8.94 million, compared with US$71.1 million for the same period last year.

Revenue for the second quarter fell by 19.1 per cent to US$262.54 million from US$324.4 for the same quarter last year.

Craig McHugh, president of Creative Labs, said that despite the fall in revenue, the company was able to improve its operating results. He noted that operating income this quarter is US$7.0 million, compared with US$3.3 million last year.

'As we look into our current third fiscal quarter we are targeting to further improve our gross margins and achieve overall profitability,' he said.

Creative chairman and CEO Sim Wong Hoo said that the company's new wireless video-conferencing system, called inPerson, was a 'breakthrough' product this year.

'With inPerson, we are creating an entirely new category, inPerson Conferencing, taking video conferencing outside the board room,' he said.

This month also saw Creative release the XDock HD - a device that works with rival Apple's music and video players. The XDock HD lets one connect the Apple iPod players to home theatre systems.

In December last year, the company claimed a world's first with its release of the credit card-sized Zen 32GB flash memory music player.

In November, it reached a company milestone by shipping its 25th million MP3 player - eight years after it released its first MP3 player.

Creative shares closed 7 Singapore cents lower yesterday at S$5.00.

Ascott secures deal to manage Shenzhen property

THE Ascott Group has secured a contract to manage a 219-unit serviced residence in Shenzhen, China.

The property, which will be named Ascott Shenzhen Maillen, is scheduled to open in the second half of 2009. It will be the first Ascott-branded serviced residence in the city, but the company's second property in Shenzhen. Earlier this year, it acquired a 173-unit serviced residence, which will be named Somerset Garden City, Shenzhen, when it opens in the second half of 2008.

Ascott Shenzhen Maillen is in the heart of the Shekou commercial and cultural centre, and will be part of an integrated development comprising an existing high-end club with recreational and lifestyle facilities and restaurants.

Ascott also said that the property is a 15-minute drive away from the newly opened Hong Kong-Shenzhen Western Corridor, a bridge which links Shenzhen to Hong Kong.

'Ascott Shenzhen Maillen is the group's fourth Ascott-branded property in China,' said Gerald Lee, Ascott's deputy chief executive of operations. 'It will complement our other 'Ascotts' in Beijing, Shanghai and Guangzhou.'

With the addition of Ascott Shenzhen Maillen, Ascott's portfolio in China will stand at about 4,200 units in 22 properties. The company aims to grow its portfolio to 25,000 units by 2010.

Ascott's shares closed one cent up at $1.73 yesterday. 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 intends to pay up to $989.5 million - or $1.73 a share - to take Ascott private.

BBR wins $95.3m Ascendas contract

BBR Holdings has won a $95.3 million contract from Ascendas (Tuas) to build an office tower at the International Business Park in Jurong East.

Piling works begin next month and the tower is expected to be completed by August next year.

The turnkey design-and-build contract was secured through BBR's wholly owned subsidiary Singapore Piling & Civil Engineering, the company's construction arm.

The deal brings BBR's current order book to $517.9 million, the company said.

BBR's chief executive officer Andrew Tan said having an in-house specialist engineering division meant the company could execute its own bored piling and post-tensioning work.

'This means that we will have better control over the construction schedule and will be in a better position to manage our costs,' he said.

The project features two 12-storey tower blocks linked by a sky bridge. The site area is 17,858 square feet. When completed, the towers will yield 41,970 square metres of gross floor area.

The building has been designed to meet the BCA Green Mark GoldPPLUS rating, said BBR. The BCA Green Mark evaluates a building for its environmental impact and performance.

Recently, BBR won a $189.6 million contract from the Urban Redevelopment Authority to construct a common services tunnel in Singapore's downtown core.

It has also secured a $6 million contract from the Land Transport Authority to upgrade vehicular bridges at seven locations in Singapore.

BBR has also ventured into property development and is now involved in two condominium projects at Nassim Hill and Holland Hill.

BBR shares closed trading yesterday at seven cents, down half a cent.

SPH MBO, SPC in digital ad tie-up

SINGAPORE Petroleum Company (SPC) has tied up with SPH MediaBoxOffice (MBO) to introduce out-of-home digital advertising at its service stations.

This is the first partnership between SPH MBO - an outdoor-media advertising company owned by Singapore Press Holdings - and a petrol retail chain, and is also the first time that a major petrol retail chain is being used extensively as an advertising channel in Singapore.

Forty-two-inch plasma screens have been installed in SPC's service stations for advertisers to air their commercials. This allows SPC customers to view ads while waiting for service.

Chris Keong, senior vice-president of marketing at SPC, said that 'SPC is donating advertisement slots on the plasma screens to various non-profit organisations to use this new media avenue to communicate their causes to the community'.

SPC has 38 service stations throughout Singapore.

James Heng, executive director of SPH MBO, said: 'This new network, in addition to our existing screens in shopping malls and banks, is a vote of confidence in the emergence of digital out-of-home media as a major advertising platform.'

SPH MBO and SPC, a regional oil and gas company linked to local conglomerate Keppel Corporation, will also be extending their partnership to develop other forms of outdoor media at the service stations.