Singapore Corporate News - 22 Apr 2008

K-Reit Q1 distributable income soars 165.9%

K-REIT Asia has reported distributable income of $11.4 million for the quarter ended March 31, a 165.9 per cent increase from the same period in 2007.

This was attributed mainly to income from its one-third interest in One Raffles Quay Pte Ltd, the acquisition of which was completed on Dec 10, 2007.

K-Reit said the contribution from One Raffles Quay was $10.9 million, comprising income support received from the vendor, interest income and dividend income.

Distribution per unit (DPU) for the quarter was 4.6 cents, or 1.3 percentage points more than forecast. K-Reit said this amount will be included in the advance distribution payout, estimated to be 6.45 to 6.5 cents per unit, for the period Jan 1 to May 7, 2008.

Net property income for the quarter was $9.1 million, or 41.5 per cent higher than $6.5 million in the corresponding quarter in 2007. This was underpinned by higher gross rental income from properties, K-Reit said. Gross rental income increased 30.2 per cent year on year to $11.2 million in Q1 2008.

Committed occupancy of K-Reit's portfolio is 99.6 per cent. With the contribution of the one-third interest in One Raffles Quay, the average monthly gross rent of its portfolio grew 69.4 per cent year on year and 14 per cent from end-2007 to $6.86 per square foot in March 2008.

K-Reit is now engaged in a rights issue. The expected gross proceeds of $551.7 million will be used to partly repay a bridging loan of $942 million drawn down for the acquisition of the one-third stake in One Raffles Quay.

This will reduce K-Reit's aggregate leverage from 53.9 per cent to 27.7 per cent and provide it with additional funding capacity to acquire further properties.

The rights units are expected to be issued on May 8.

K-Reit said it expects to benefit from positive rental revisions, given its current rents are below market rates and that 42.2 per cent and 20.2 per cent of its portfolio's net lettable area is due for lease expiry and rent review respectively between 2008 and 2010.

K-Reit's units closed one cent higher at $1.41 yesterday.

KTT Q1 earnings dip 12% to $10.8m

KEPPEL Telecommunications and Transportation (KTT) yesterday posted a net profit of $10.8 million, down 12.1 per cent, due to higher tax, for the first quarter ended March 31. Earnings per share fell 9.5 per cent to 1.9 cents.

MobileOne, 19.9 per cent owned by KTT, contributed as usual the bulk of profit - up 12.1 per cent at $11.9 million.

KTT said that group pre-tax profit was 20.7 per cent higher at $14.4 million on turnover of $27.4 million, up 27.5 per cent.

But taxation for the period came to $3.7 million, against negative $295,000 in the previous corresponding period. In 2007, the group enjoyed a writeback of deferred taxation due to reduction in the corporate tax rate and tax assets arising from group relief.

KTT said that turnover was up mainly due to higher revenue from the logistics unit, which was 40 per cent up due largely to good domestic demand as well as contribution from TradeOneAsia, a sourcing subsidiary.

Keppel Logistics is the leading retail logistics provider in Singapore and last year won new customers such as French food giant Danone, Kimberly Clark and Unilever.

Singapore warehouses enjoyed close to 100 per cent occupancy last year. Keppel Logistics operates 1.5 million square feet of warehousing space here, according to KTT's 2007 annual report.

Qian Hu Q1 profit jumps 33.7%

ORNAMENTAL fish breeder and supplier Qian Hu Corporation has reported a 33.7 per cent rise in net profit to $1.27 million for the first quarter ended March 31.

Revenue increased 4.7 per cent to $23 million from $21.9 million previously.

Earnings per share, fully diluted, came to 0.28 of a cent, up from 0.23-cent.

Revenue grew as sales of fish rose 5.9 per cent to $11.6 million and Qian Hu increased exports to untapped foreign markets.

Revenue from aquarium accessories grew 6.4 per cent to $8.7 million, thanks to expanded distribution in Malaysia, Thailand and China. But revenue from plastics manufacturing dipped 5.3 per cent to $2.6 million as sales to the electronics sector fell.

Qian Hu believes, however, that demand for its plastic products from the food industry and export markets would pick up in the coming quarters.

'While we are pleased that the ornamental fish performance continued to contribute strongly to profitability, we are particularly pleased with the heightened profitability of our accessories business, boosted by our conscientious effort to gradually revive our accessories business margin back to a respectable level with higher export volume,' said executive chairman and managing director Kenny Yap.

Qian Hu expects profit and revenue to continue to rise for FY2008 as fish sales grow, the accessories export business improves and operations in Malaysia, Thailand and China make positive contributions. 'We expect our accessories business to contribute to a faster pace of growth in profit margins,' Mr Yap said.

The first ornamental fish company listed on the Singapore Exchange main board, Qian Hu distributes more than 1,000 species of ornamental fish and makes a range of aquarium accessories.

Its shares last closed unchanged at 13.5 cents on Friday.

Mubadala, CapitaLand in property venture

Singapore- based CapitaLand and Abu Dhabi investment agency Mubadala Development Co said that they had set up a US$300 million joint venture to develop property projects.

The new venture, in which Mubadala has a 51 per cent stake, will focus on developing projects in the United Arab Emirates (UAE) capital Abu Dhabi, Mubadala chief financial officer Carlos Obeid said at a news conference yesterday.

CapitaLand, South-east Asia's largest developer, will begin with a US$4 billion mixed-use project in Abu Dhabi, Mr Obeid said.

'Through this joint venture, we will turn property development ideas into reality,' he said. 'Our strategy of making capital-intensive investments with long-term horizons will contribute to the regeneration of property in Abu Dhabi as well as enhance the real estate sector in the emirate.'

CapitaLand reported a surprise 49 per cent jump in quarterly earnings on strong home sales in February and said that it planed to dig into its $4.4 billion cash pile for expansion in countries such as India and China.

Mubadala is one of the state-owned agencies Abu Dhabi and other members of the UAE federation are using to invest their windfall from an almost sixfold increase in oil prices since 2002.

In March, it set up a new company with Chicago- based John Buck Co to develop projects across the Middle East.

KepLand to develop Vietnam residential project

KEPPEL Land has secured an option to develop a new residential site in Vietnam's Ho Chi Minh City, in a project that will cost more than S$500 million.

The proposed development in the city's District 2 is expected to yield 1,500 apartments with a potential total gross floor area of 244,800 sq m. It will increase the company's portfolio in the district to more than 7,500 homes.

Aimed at the upper-middle market, the luxury apartments are expected to be launched in 2009. Total investment for the proposed project, which will be developed in phases according to demand, is estimated at US$390 million (S$528 million).

The option agreement was entered into by Keppel Land's wholly-owned subsidiary Earlsbay Investments Pte Ltd with Vietnamese developer Hong Quang Co Ltd.

Upon exercise of the agreement, the issue of an investment certificate and obtaining government approvals, Earlsbay will take a 60 per cent stake amounting to US$78 million of the joint venture company's total registered capital of US$130 million. Hong Quang will subscribe for the remaining interest.

In February, Keppel Land was awarded an investment licence for a prime residential project comprising 2,400 waterfront apartments in a popular and established residential section of Ho Chi Minh City's District 7.

The company was also given the go-ahead for The Estella, a prime residential project comprising some 1,500 upmarket apartments in the popular An Phu Ward in the city's District 2.

Pan-United clinches $23m supply deal

PAN-UNITED Corporation has won a $23 million ready-mixed concrete supply contract, its third relating to work on stage one of the Downtown MRT line.

Under the contract, it will supply concrete to Taisei Corporation to construct Landmark station and associated tunnels. The contract lifts Pan-United's supply order book for DTL to $53 million.
Pan-United is engaged in port and logistics, shipping and industrial and trading (I&T) activities. Its I&T group produces and supplies basic building materials such as cement, aggregate products and ready-mixed concrete.

Earlier this year, the Building and Construction Authority estimated that Singapore's 2008 construction demand would hit $23-27 billion, with a projected 35 per cent increase in demand for ready-mixed concrete.

Pan-United chief executive Patrick Ng said: 'We believe the reasonably high level of construction demand is sustainable over the next few years and we are gearing up to support the pipeline of projects.'

These projects - infrastructure, commercial, industrial and residential - have completion dates spread over the next five to 10 years, promising a steady need for the materials that Pan-United provides.

Mr Ng said: 'We have also started to offer a range of green concrete products to give customers alternatives to traditional raw materials.'

Pan-United shares closed two cents higher at 64.5 cents yesterday.

E3 names new CEO and exec director

E3 HOLDINGS has appointed Jonathan Ow Kim Chuan, 41, its new CEO and executive director, effective last Friday. The appointment follows the resignation of Anthony Soh, who stepped down as president last week. Mr Soh, who owns more than 5 per cent of E3, is at the centre of a failed Jade Technologies takeover bid. Mr Ow, a former lawyer and chartered secretary, also holds directorships at a host of companies.

Sing's JV terminates property purchase

SING Holdings has said that its joint venture firm, Finland Gardens Pte Ltd, has agreed to terminate the purchase of all 48 strata lots and common property of the development known as 41 East Coast Avenue and 54 East Coast Terrace. The vendors of the property have also withdrawn their appeal filed with the High Court against a previous application dismissal by the Strata Titles Board.

Jurong Cement doubles Q1 earnings

JURONG Cement has more than doubled its first-quarter net profit to $1.11 million, from $407,000 for the first three months last year. The profit jump was achieved despite a 13 per cent drop in revenue to $20.7 million.