Singapore Corporate News - 25 Apr 2008

Keppel Corp Q1 profit up 4%

KEPPEL Corp yesterday warned of a tough year ahead as the multi-industry conglomerate posted a rise of 4 per cent in first-quarter profit to $262 million.

The profit attributable to shareholders for the three months ended March 31 correspondingly lifted earnings per share by 4 per cent to 16.5 cents. Revenue rose 9 per cent to $2.21 billion from $2.03 billion.

'2008 looks to be a tough year,' Keppel Corp said in its results announcement. 'Problems in the US sub-prime mortgage market which surfaced in 2007 spread in many ways to affect credit markets and the rest of the economy. As a result, business conditions deteriorated worldwide.'

The group brought 'other operating expenses' down by $25 million or almost 70 per cent to $10.95 million but this was more than offset by a $73 million or 31.3 per cent jump in staff costs to $306.6 million.

The drop in revenues from its offshore & marine and property divisions was offset by a much better performance at the burgeoning infrastructure division where revenue more than trebled to $505 million as income from the Singapore cogen power plant and a Qatar engineering, procurement and construction (EPC) contract kicked in, leading to a pre-tax profit of almost $16 million. Although this is still the group's smallest division, it posted the strongest profit growth.

Going forward, Keppel expects the Keppel Merlimau cogen power plant, the NEWater plant and Keppel Gas to contribute more meaningfully with a full year of operation. In addition, EPC contracts in Qatar, Europe and other countries are proceeding on schedule and are expected to increase the division's contribution to the group's profitability.

At the key offshore and marine division, the group's biggest profit contributor, Keppel blamed the 9 per cent drop in revenue to $1.4 billion and the 9 per cent fall in pre-tax profit to $170 million on timing differences in the recognition of revenue from the outstanding order book. Keppel reiterated, however, that its order book remains strong with a net $11.8 billion of orders stretching to 2011, although it secured a modest $664 million of new orders in the first quarter.

'The fundamentals of the industry remain robust, underpinned by high crude oil prices and projected higher E&P capital expenditure. Based on potential prospects and enquiries, the order flow outlook is positive,' Keppel said. In response to a query on order cancellations at a post-results webcast, Keppel Offshore and Marine senior executive director Choo Chiau Beng gave a definitive answer that it had not seen any. Meanwhile over at the property division, revenue was 6 per cent lower at $300 million due to no significant launches in the current year as opposed to the completion of several residential projects in Singapore and China in the last financial year. However, pre-tax profit from the property division still increased by 15 per cent to $105 million due to the recognition of profit from Reflections at Keppel Bay. Keppel Corp owns 70 per cent of Keppel Bay with Keppel Land owning the balance 30 per cent. In the previous first quarter, no significant profit was recognised by Keppel Bay.

Given the poorer market sentiment for property in the year ahead, 'the group will monitor the market closely and launch the second phase of Reflections at Keppel Bay and Marina Bay Suites when market conditions are more favourable', Keppel said. 'Despite the global financial turmoil, Asia is expected to continue to grow, albeit at a slower pace,' the group added.

Keppel Corp shares closed 32 cents lower at $11.66 yesterday.

CRCT income for distribution 8.5% higher than forecast

CAPITARETAIL China Trust (CRCT) has announced income available for distribution to unit-holders of $6.3 million for the period Feb 5 to March 31 - $0.5 million or 8.5 per cent higher than its forecast of $5.8 million.

Available distribution per unit (DPU) for the period is 1.02 cents (6.66 cents on an annualised basis), which is 8.5 per cent higher than its forecast of 0.94 cents (6.14 cents on an annualised basis). This translates to 9 per cent year-on- year DPU growth.

Based on the unit price of $1.50 on April 23, the distribution yield works out to 4.44 per cent.

CRCT explained that the last distribution was scheduled to take place in respect of its semi-annual distributable income for the period July 1 to Dec 31, 2007. 'In order to ensure fairness to unit-holders in issue on the day immediately prior to Feb 5, 2008, the day on which the new units are issued under the equity fund-raising for the acquisition of Xizhimen Mall, the manager has made a cumulative distribution of 4.04 cents for the period July 1, 2007 to Feb 4, 2008,' it added.

Lim Beng Chee, CEO of CRCT manager CapitaRetail China Trust Management, said: 'Following a year of proactive asset management of our portfolio, the malls have registered robust top-line growth, with Wangjing Mall and Qibao Mall delivering a year-on-year revenue increase of 18.8 per cent and 45.6 per cent respectively. Tenants have also enjoyed remarkable sales growth, with same-store sales at Wangjing Mall, Qibao Mall and Xinwu Mall growing 30.9 per cent, 27.4 per cent and 51.8 per cent respectively.'

Gross revenue for Q1 2008 was 116.3 million yuan(S$22.5 million), representing a y-o-y increase of 29.8 million yuan or 34.4 per cent. This was mainly attributed to revenue from Xizhimen Mall, which was acquired on Feb 5, as well as occupancy growth at Wangjing Mall and Qibao Mall. Excluding Xizhimen Mall, gross revenue for Q1 2008 was 95 million yuan, a y-o-y increase of 8.5 million yuan or 9.8 per cent.

Net property income (NPI) for the quarter was 72.7 million yuan, a y-o-y increase of 18.5 million yuan or 34.2 per cent. Excluding Xizhimen Mall, NPI for the quarter was 59.2 million yuan, a y-o-y increase of 5 million yuan or 9.2 per cent.

CRCT's unit price closed 10 cents higher at $1.60 yesterday.

MapletreeLog distributable income up 37% in Q1

MAPLETREE Logistics Trust (MapletreeLog) yesterday reported distributable income of $21 million for the first quarter ended March 31, up 37 per cent from the corresponding period last year.

This comes on the back of a 48 per cent jump in gross revenue from the year-ago period to $42.6 million.

The increase in distributable income came as MapletreeLog acquired an additional 23 properties within the past one year. As at March 31, the trust has a portfolio of 72 properties. Eight acquisitions are pending completion, which will raise the trust's portfolio to 80 properties spread across Singapore, Malaysia, Hong Kong, Japan, China and South Korea, with a book value of more than $2.7 billion.

Unitholders will receive distribution per unit (DPU) of 1.90 cents for Q1 2008, which is 28.4 per cent higher than in the year-ago period.

MapletreeLog's website shows analysts' DPU forecasts for 2008, made in January, ranged from 6.70 cents to 8.01 cents.

MapletreeLog also reported an improvement in borrowing costs. Due to a sharp drop in interest rates for major currencies during the quarter, the trust's weighted average annualised interest rate fell from 3.3 per cent per annum in the Q4 2007 to 2.9 per cent in Q1 2008.

According to Mapletree Logistics Trust Management (MLTM) CEO Chua Tiow Chye, the trust has started the year with a strong performance.

'We will continue with our yield plus growth strategy but in the current environment, we will remain focused on optimising yield from the existing portfolio while continuing to identify selective acquisition opportunities which we can undertake when the environment normalises,' Mr Chua said.

MapletreeLog had announced a $500 million rights issue in December last year but deferred the plan in January when the capital market softened.

On this, Mr Chua said: 'We will continue to monitor and review when it will be conducive to re-visit an equity fund raising.'

MapletreeLog also reported a higher leverage ratio of 54.7 per cent as at March 31, up 1.3 percentage points from Dec 31 last year. This was largely due to borrowings drawn down to fund the trust's committed acquisitions in Q1 2008.

CapLand JV buys IT park site near Mumbai

CAPITALAND said yesterday that its associate Loma IT Park Developers has bought a 121,450 sq m site at the Trans Thana Creek industrial area in Navi Mumbai, India, for $79 million. The seller is Standard Industries, a company listed on the Bombay Stock Exchange and the National Stock Exchange of India.

CapitaLand and its partner plan to build an information technology park and a Grade A office complex on the site, which is in the heart of the Mumbai-Pune 'Knowledge Corridor'. The project will be CapitaLand's first such development in India.

Loma is a wholly owned subsidiary of Arc-CapitaLand India - a joint venture set up by CapitaLand and Bahrain-based Arcapita Bank to develop the site. The proposed development will comprise 2.5 million sq ft (about 232,342 sq m) of built-up space, roughly half of which will be set aside for IT companies.

Construction is expected to begin by the first quarter of 2009. Completion will be in phases over the next five years. CapitaLand president and chief executive Liew Mun Leong said: 'India has been identified as an important new market in Asia for the CapitaLand group. Its immense potential as a high growth market cannot be ignored.'

Arc-CapitaLand India has appointed London-based Foreign Office Architects to design the project.

The development is expected to set quality benchmarks to meet the demands of multinational companies and high-tech businesses. It will also be one of the first major developments in Mumbai to feature environmentally sustainable commercial space.

Darco clinches projects worth $25m

DARCO Water Technologies said yesterday that it has secured several projects worth $25 million, taking its orders for delivery this financial year to $126 million.

The jobs secured through its subsidiaries include two wastewater treatment projects in Taiwan worth $12.3 million. Another $11.5 million came from repeat orders for Phase 2 of Seagate Malaysia's facilities in Johor for air management and wastewater treatment systems. The remaining $1.2 million came from smaller projects in Malaysia and China.

Except for one project awarded by the municipal government in Taiwan, the other projects are from the electronic and semiconductor sectors.

Darco expected the new orders to have a positive impact on its FY2008 performance and said that it is confident of realising $100 million in revenues for the year.

Darco chief executive Thye Kim Meng said: 'The electronics sector has been generally slower but we have been able to increase our market share. The main reason is that these mid-size projects fit into our company profile.'

STATS ChipPAC Q1 profit rises 4.7%

STATS ChipPAC Ltd said first-quarter net profit rose 4.7 per cent, the slowest in three quarters, as demand for chips fell because of the economic slowdown. Net income rose to US$17.9 million, or a basic nine US cents per American depositary share, from US$17 million, or eight US cents, a year earlier. Sales at STATS ChipPAC rose 9.4 per cent to US$427.2 million. STATS ChipPAC's customers 'became increasingly cautious about their business outlook because of the global economic uncertainty', CEO Tan Lay Koon said.

ST Electronics wins $36.7m Aussie contract

SINGAPORE Technologies Engineering said its electronics arm Singapore Technologies Electronics has won a $36.7 million contract from Thales Australia. ST Electronics will design and develop an interactive auxiliary display sub-system, a data warehouse and consoles, as well as be responsible for hardware procurement, deployment, training and data adaptation services for delivery to end-customer Civil Aviation Authority of Singapore over a four-year period.

Sinostar warns of lower Q1 profit

SINOSTAR Pec Holdings has warned of lower first-quarter pre-tax profit. It cited rising oil prices and lower quantities of petrochemical products sold as China's snowstorms disrupted raw material supply.

Yongnam to form JV with KTC Civil Engg

YONGNAM Holdings said it will form a joint venture (JV) with Singapore's KTC Civil Engineering & Construction Pte Ltd to undertake an $81.4 million contract for temporary decking, steel waling, strutting and excavation works at the South Podium of the Marina Bay Sands Integrated Resort. The JV will be 70 per cent owned by Yongnam. Yongnam, together with partners, has so far won contracts worth more than $170 million for the IR development.