Singapore Corporate News - 30 Jan 2008

KepLand revenue, profit hit record

KEPPEL Land's turnover crossed the billion-dollar mark in 2007 to hit a record $1.4 billion, a rise of 48.5 per cent from the previous year's $948 million.

The 12-month period ended Dec 31, 2007, saw profit after tax and minority interests (Patmi) more than trebled from $200.3 million to a record $779.7 million. This was bolstered by strong residential sales, a net gain on revaluation of investment properties of $343.6 million, and a rise of $100.5 million under an item which includes corporate restructuring surplus and enbloc property sales. The latter $100.5 million gain was after taking into consideration a $235.2 million surplus from the restructuring of its one-third interest in One Raffles Quay and $89 million in offsets to account for the diminution in value of the group's Myanmar hotels and the fall in the value of rupiah relating to its prior investments.

Full-year earnings per share came to 108.3 cents, up from 2006's 27.9 cents. Q4 Patmi rose from $81.2 million to $572.3 million while turnover climbed 8.6 per cent to $371.4 million.

Announcing its financial results yesterday, KepLand group CEO Kevin Wong also said that it was proposing a final one-tier dividend of 8 cents per share and a special dividend of 12 cents to 'reward shareholders for their support'. The proposed dividends amount to $144 million.

Patmi from property trading made up 35 per cent or $274.9 million of the total 2007 Patmi. Mr Wong said this was driven by profit contribution from Singapore developments including Marina Bay Residences, Reflections at Keppel Bay and Park Infinia at Wee Nam.

Contributions from overseas business made up 39.6 per cent while Singapore business contributed 60.4 per cent, up from 36.4 per cent in the previous year. For the year ahead, Mr Wong said that overseas contributions from residential properties will likely increase to about 50 per cent, in light of the weakening US economy. 'Our projects are mostly in China and Vietnam, and the subprime effect on these two countries will be less.'

He added that most of its development projects in these two countries were targeted at the mid- to high-end market which was supported by 'genuine buyers'. He also said the newly instituted capital gains tax in Vietnam should add stability to the market there. 'Demand for housing in these two countries is coming from a very low base,' he added.

In 2007, Keppel Land acquired eight residential sites in Vietnam with a total of 22,225 potential units for sale. Three developments are expected to be launched this year.

Other overseas launches for 2008 include a 1,000 unit residential development in Jeddah, Saudi Arabia, while two mega developments with over 8,000 units in Shanghai and Shenyang, China, is expected to be launched in 2009.

Mr Wong said it will continue to look for potential development sites and these will likely be in China, Vietnam and the Middle-East. Highlighting Keppel Land's low gearing of 0.41 per cent, and the possibility of borrowing to fund future acquisitions, he also said: 'We can gear up.'

At the end of the trading day yesterday, Keppel Land shares closed 2 cents higher at $6.45 per share.

CIT distributable income for Q4 surges 59%

CAMBRIDGE Industrial Trust (CIT) has posted distributable income of $11.59 million - 59 per cent higher year on year - for its fourth quarter ended Dec 31, 2007.

The figure comprised $1.6 million distributed to unit holders for the period Oct 1-17, just ahead of an equity fund-raising exercise completed on Oct 18, and distributable income of almost $10 million for the rest of the quarter.

The $10 million reflects distribution per unit (DPU) of 1.258 cents, which works out to an annualised figure of 6.122 cents and a resulting distribution yield of 9.2 per cent based on CIT's closing price of 66.5 cents yesterday. The counter ended the day half a cent lower.

Net property income for Q4 rose 46.3 per cent year on year to $13.9 million on a 49.1 per cent rise in gross revenue to $16.1 million.

For the year ended Dec 31, 2007, CIT posted distributable income of $35.7 million, which was 31.7 per cent higher than forecast by the trust's manager, Cambridge Industrial Trust Management.

Net property income of $45.8 million was 28.3 per cent above forecast, while gross revenue of $53 million surpassed the forecast by 22.7 per cent.

CIT's portfolio comprised 40 properties at end-December 2007, up from 27 assets a year earlier. The 40 properties, valued at $927.8 million at end-2007, were fully occupied as of that time.

The trust's manager said it 'believes the demand for quasi-offices will spill into demand for light industrial space resulting from current rental pressure on prime office space in the Central Business District'.

The latest DPU of 1.258 cents for the period Oct 18-Dec 31, 2007 will be paid on Feb 29.

SIAEC Q3 net profit dips 3.1% to $53.6m

SIA Engineering Company (SIAEC) yesterday posted a third-quarter net profit of $53.6 million for the period ended Dec 31, 2007, down 3.1 per cent from a year earlier.

Operating profit dropped 27.9 per cent to $19.1 million. Earnings per share fell by 4.6 per cent to 4.99 cents.

Group revenue rose 1.1 per cent to $248.6 million. While line maintenance revenue increased by 12 per cent, revenue from airframe maintenance and component overhaul declined 2 per cent due to a lower volume of component work in the quarter and a weaker US dollar.

An increase in business volume in fleet management led to 11 per cent growth in revenue for the segment.

Expenditure increased by 4.7 per cent mainly due to higher staff cost, which was attributed to an increase in staffing and related costs to support future growth. A special 60th anniversary bonus was also paid to employees for the quarter.

For the nine months ended December 2007, revenue improved by 6.2 per cent to $784.5 million, while net profit rose 2.5 per cent to $198.6 million.

'The outlook for the aircraft maintenance, repair and overhaul (MRO) industry remains favourable, underpinned by steady traffic growth and increased outsourcing of MRO work,' SIAEC said.

The group's subsidiary, joint venture and associated companies - spread across seven countries - are expected to continue their positive contributions, it added.

'The operating environment, however, remains challenging. Pressure on rates and the weakness in the US dollar will remain as key challenges to the financial performance of the group.'

New business line from Creative in March

CREATIVE Technology has followed up a bullish second quarter earnings announcement with details of a new line of business - a subscription-based video conferencing service.

Now working with a third-party service provider here, Creative plans to launch the service in Singapore by March, said Craig McHugh, president and chief operating officer of Creative Labs. It will be available in Europe by June, he added.

Aimed at small businesses and consumers, the new offering is a hardware-and-service combo based on a Singapore-developed product called inPerson Conferencing.

It was launched this month in the United States at the Consumer Electronics Show in Las Vegas. Creative aims to market the service as a premium video-conferencing system - one that's good enough to be compared to dedicated boardroom video-conferencing systems but without their high prices.

Dedicated boardroom systems by Cisco, Polycom, Tandberg and others can cost tens of thousands of dollars. Creative's hardware - which looks like a portable flip-top DVD player - costs about US$700. A monthly service fee starts from US$15.

Portability is another key feature, said Mr McHugh. Unlike fixed boardroom systems, the wireless inPerson device can be lugged around by its users, and and can be connected to any wireless networks.

Subscribers can make video calls to other subscribers and PC users, as well as conduct multi-party small group conferencing. Singapore pricing has yet to be decided.

Mr McHugh said that the service will be made compatible with fixed and mobile telephone networks over the next few months. This would draw Creative closer to the telecoms equipment segment - where rival Apple has thrived with its iPhone product.

There was, however, no mention of a Creative mobile phone foray, only that Creative is focused on 'video-enabled' conferencing.

'In five years, all calls made in the US and Europe and parts of Asia will be video-enabled, so this is the largest market opportunity we ever had,' Mr McHugh said.

'This market could be larger than the MP3 and Sound Blaster space.'

Fortune Reit distribution income up 3% in 2007

FORTUNE Real Estate Investment Trust has announced distribution income of HK$284.8 million (S$51.8 million) for 2007, up 3 per cent from 2006.

Distribution per unit for the year ended Dec 31 edged up 2.5 per cent to HK$0.3512.

'We are pleased that Fortune Reit's portfolio of 11 retail malls delivered stable and sustainable growth for FY07,' said Stephen Chu, chief executive of the Hong Kong-based Reit's manager, ARA Asset Management.

'This was driven by strong rental reversions of about 15.6 per cent for the whole year on a portfolio basis. Our pro-active asset management strategies, coupled with exciting promotional events in the malls, have contributed to healthy demand from tenants and shoppers.'

Fortune said that as of end-2007 its tax-exempt yield was 6.7 per cent, up from 5.8 per cent a year earlier. Strong rental reversions were driven by its Waldorf Garden Property, which was enhanced in August.

The average rental rate of the entire portfolio was 6.3 per cent higher at HK$25.23 psf at Dec 31, 2007, versus HK$23.74 psf a year earlier. Approximately 45 per cent of leases in the portfolio expire this year, creating a good opportunity for organic growth in a strong retail market, Fortune said.

Pan-United awarded $30m MRT contracts

PAN-UNITED Corporation has been awarded two contracts worth a combined $30 million to supply ready-mixed concrete (RMC) for Singapore's new MRT Downtown Line (MRT DTL) Stage 1. The 4.3 km long MRT DTL Stage 1 will run from Bugis Station on the East West Line to Chinatown Station on the North East Line and is targeted to be completed in 2013.

Rokko earnings up 18.3%

ROKKO Holdings reported revenue for the year ended Dec 31, 2007, of $33.3 million, up 11.1 per cent. Profit attributable to equity-holders was $5.1 million, an 18.3 per cent increase.

Multi-Chem Q4 net profit doubles

MULTI-CHEM reported revenue of $140.8 million for FY07, up 45 per cent from FY06. Revenue for Q407 was $38.2 million, an increase of 41.9 per cent. Net profit was $15.4 million (up 8 per cent) on a full-year basis and $6.47 million (up 102 per cent) for the fourth quarter.