Singapore Corporate News - 15 Mar 2008

First Resources up as output fears subside

INVESTORS flocked back to the counter of First Resources yesterday, sending the stock up as much as 23 per cent to $1.17, after the company said the Indonesian corruption watchdog has withdrawn its intention to auction off three of its plantation and milling assets.

The company's update allayed investors' fears that the Indonesian palm oil producer's output for this year could be cut by some 25 per cent.

First Resources shares closed trading at $1.13, a gain of 18 cents or 18.9 per cent, after a hefty volume of 47.41 million shares changed hands.

The spillover effect of the news sent shares of other plantation stocks up. Indofood Agri Resources jumped 16 cents or 8.1 per cent to $2.14 and Wilmar International, which accounts for some 12 per cent of the First Resources' net sales via Wilmar Trading and Kuok Oils and Grains, added five cents or 1.3 per cent to $4.00.

Yesterday, First Resources said the Indonesian media reported that the KPK (Indonesia's Corruption Eradication Commission) has announced in a press conference that the financial penalty of about US$38.3 million imposed on its founder and former shareholder Martias by the Supreme Court in Jakarta has been fully paid.

'The company wishes to clarify that it has also not extended any financial assistance to Martias or any party in relation to the payment of this financial penalty,' First Resources added.

DBS Vickers upgraded its rating on First Resources from 'hold' to 'buy' yesterday and raised its target price from $1.55 to $2.00.

'Given this announcement, we believe uncertainties on the stock have been removed,' the brokerage said.

An official announcement from the KPK is expected to be published in Indonesian newspapers today.

According to an article in the Indonesian newspaper RiauPo published yesterday, KPK chief Antasari Azhar confirmed that Martias has paid for the state loss amount of 346 billion rupiah (S$51.9 million) and the amount has been received by KPK treasury unit. With the payment, KPK will then release the 19 assets that it deemed to be belonging to or related to Martias. Martias has already served his 18 months' jail sentence.

A week ago, shares of First Resources were battered by reports in the RiauPos and Media Indonesia that KPK sought to seize 19 assets from Martias to recover damages pertaining to a law suit last year. These assets include three subsidiaries owned by First Resources - PT Ciliandra Perkasa, PT Pancasurya Agrindo and PT Perdana Intisawit Perkasa.

First Resources' CEO Ciliandra Fangiono had clarified that Martias, his father, does not have any direct or indirect stakes in First Resources or any of its subsidiaries.

Martias is the president of the Surya Damai Group (SDG) and was convicted of corruption last May in connection with the grant of land use rights for private plantations in East Kalimantan in areas reserved as forest.

RiauPo reported that the governor of East Kalimantan Suwarna Abdul Fattah was said to be guilty of allegedly granting approval to 10 subsidiary companies of SDG in the illegal logging scam and was sentenced to four years in prison.

Chartered keeps loss forecast amid demand slump

CHARTERED Semiconductor Manufacturing, the maker of chips that power Microsoft Corp's Xbox 360 game console, reiterated it may post its first loss in three quarters as demand for electronics falters.

The Feb 1 forecast that first-quarter results may range from a net loss of US$5 million to a profit of US$5 million is unchanged, Chartered said in a statement yesterday. Net income was US$5.34 million a year earlier. Sales may rise as much as 15 per cent to US$373 million.

Demand for chips used in electronics including mobile phones and personal computers has fallen as consumers curb spending amid slowing growth in the US, Chartered's largest market. Texas Instruments, the second-biggest maker of chips that run handsets, on March 10 cut its first-quarter sales and earnings forecasts, citing weaker handset demand.

'The quarter is essentially progressing in line with what we had anticipated earlier,' George Thomas, chief financial officer of Chartered, said in the statement.

Chartered gained 1.5 per cent to 69 cents at the close of trading yesterday. The stock has tumbled 29 per cent this year, compared with an 18 per cent drop for the Straits Times Index.

Chartered is scheduled to report first-quarter earnings on April 25, before the Singapore market opens.

Midas tie-up wins 550m yuan rail-car contract

CONSORTIUM involving Midas Holdings' joint-venture company Nanjing SR Puzhen Rail Transport (NPRT) has secured a 550.4 million yuan (S$107.6 million) contract to supply metro train cars.

Singapore-listed Midas, a China-based manufacturer of aluminium alloy extrusion products, said the contract from Nanjing Metro was awarded to NPRT and the latter's consortium partners Shanghai Alstom Transport Electrical Equipment Co and Alstom Transport SA.

Midas has a stake of 32.5 per cent in NPRT, a Sino-foreign joint venture.

Under the latest contract, which is an extension of a contract signed with Nanjing Metro in April last year, NPRT and its consortium partners will supply an additional 10 metro train sets or 60 train cars for the Nanjing Metro Line 2 Phase 1 project. NPRT has an estimated 75 per cent share of this contract.

Delivery of these 60 train cars is expected to start in 2010, upon completion of the April contract, and is expected to be completed before June 30, 2011.

'The contract is a testament of NPRT's product quality and ability to meet customers' requirements. Both NPRT and Midas will continue to uphold and improve the quality of our products and services to secure more contracts,' said Patrick Chew, Midas chief executive officer.

Midas, which serves the transportation and infrastructure sectors in China, said the contract is not expected to have a material impact on the group's FY2008 financials.

Midas' customers include multinational companies and China state-owned companies.

Besides the current contract, it is also involved in other projects such as the Beijing-Tianjin High Speed Train Project, Shanghai MRT Line 1 Extension Project, Shenzhen MRT Line 1 Extension Project, Guangzhou MRT Line 3 and Tianjin MRT.

Besides China, it is also working on the Circle Line project in Singapore, Metro Oslo MRT in Norway, Valero Rus Project in Russia, and Desiro Mainline Project in Germany.

Shares of Midas closed trading at 92 cents each yesterday, up four cents.

Beyonics posts 23% drop in Q2 profit

DESPITE a 27.2 per cent rise in revenue to $254.9 million, Beyonics Technology's net profit for the second quarter ended Jan 31 fell 23.3 per cent year-on-year to $3.9 million.

Cost of sales climbed 29.5 per cent to $241.8 million, resulting in a 4 per cent dip in gross profit for the quarter to $13.1 million.

The results brought net profit for the first half to $7.52 million, a year-on-year drop of 37.7 per cent, while revenue came in 5.2 per cent higher at $469.3 million.

Gross profit for the six months eased 2.7 per cent to $27.3 million, with Beyonics blaming it on higher depreciation, adverse exchange rates and lower contribution margin from its new PCBA business from Seagate.

For the half year, the integrated manufacturing services provider's core business - electronic manufacturing services - saw revenue increase by nearly 4.5 per cent to $376.8 million due mainly to the commencement of the new PCBA business from Seagate in January this year. But this was partly offset by lower orders for battery packs and cordless phones.

Revenue from its precision engineering services division increased by 8.6 per cent to $92.5 million, mainly due to a healthy hard disk drive industry, the company said.

The company's selling, general and administrative expenses increased 27.4 per cent to $18.8 million, due primarily to exchange losses arising from inter-company loans and trade balances.

Foreign exchange losses for the half year were $5.74 million, more than treble the previous corresponding period's $1.67 million.

Finance costs also grew by 32.6 per cent to $1.78 million in the first half mainly due to higher bank borrowings to finance the acquisition of the Seagate operation in Senai.

Earnings per share for the first half of the year fell from 2.28 cents to 1.41 cents.

Chief executive Goh Chan Peng says he expects revenue to improve in the second half of the financial year as orders for battery packs and cordless phones are expected to recover. 'However, uncertainty due to volatility in raw material prices and exchange rates may affect our profitability,' he added.

Beyonics' shares closed unchanged yesterday at 25 cents.

Popular Holdings' third-quarter earnings fall 8.2%

POPULAR Holdings saw its net profit slip 8.2 per cent for its third quarter ended Jan 31, 2008 - to $8.9 million, from $9.7 million the year before, as higher expenses ate into takings.

The group, best known for its bookstore chain, managed to boost turnover by some 10 per cent to $134.12 million for the fiscal third quarter, but higher operating, financial, distribution and selling expenses made their presence felt.

Popular's Q3 earnings per share fell to 1.98 cents, from 2.16 cents the year before. For the nine months to Jan 31, net profit rose 3.6 per cent to $18.54 million while turnover rose 9 per cent to $341.8 million.

The group's turnover in the retail and distribution division for the nine-month period rose 12 per cent to $282.4 million. Popular said this was due mainly to additional revenue from new retail outlets in Singapore and Malaysia, and the addition of a new Mega bookstore in Hong Kong in mid-2007.

An improved performance from some of the retail outlets in Singapore and Malaysia, and takings from its two annual events - BookFest@Malaysia in May 2007 and BookFest@ Singapore in December 2007 - also boosted takings.

Popular's nine-month turnover in the publishing and e-learning division decreased by 3 per cent to $59.4 million, which it said was partly attributable to the depreciation of the Hong Kong dollar against the Singapore dollar as well as a decline in the sales of supplementary products such as i-pens and audio products.

The group said its retail division will attempt to sustain its growth in Malaysia, while its publishing division will continue its expansion - particularly in Hong Kong, where it is involved in textbooks and supplementary books publishing.

Popular's property development business will focus on mid- to high-end projects.

MIIF divests stake in Macquarie Airports

MACQUARIE International Infrastructure Fund (MIIF) said it has sold its entire stake in Macquarie Airports for $154.3 million and would use the proceeds to reduce its existing debt to $23.9 million. It has also accepted offers from unnamed financial institutions to establish $440 million in term debt facilities with a three-year maturity. -- Reuters

Sunright H1 net profit jumps to $4.96m

SUNRIGHT'S net profit for the first half ended Jan 31, 2008, more than doubled to $4.96 million from $2.2 million a year ago. This was thanks to higher profits from associated companies due largely to a writeback of deferred tax provisions. Total revenue for the six months fell 20 per cent to $36 million.

Tri-M signs MOU to buy Kingworld

PRINTED circuit board maker Tri-M Technologies, which is on the Singapore Exchange watchlist, said it has entered into an MOU to fully acquire Kingworld Resources, which is in the oil exploration and production (E&P) business. The purchase consideration is to be negotiated. If the proposed transaction proceeds, the payment will be satisfied partly in cash and partly via the issue of shares. The target company is wholly owned by Tiong Hiew King and Tiong Kiu King - the brothers of Tri-M's executive director, Tiong Lk King.

SNF's 2007 net loss swells to $2.95m

SNF Corp's net losses widened for the year ended Dec 31, 2007, to $2.95 million from $768,710 the previous year, as revenue dropped 19.2 per cent to $20.7 million and competition drove down selling prices. The group said it continues to expect the business environment in which it operates to remain extremely competitive and the continued weakening of the US dollar, volatile oil prices and the uncertainty of the global economy to pose a challenge to the group's current operations.

Centraland net profit dips 9.4% to 41m yuan

CENTRALAND said its 2007 full-year net profit fell 9.4 per cent to 41.14 million yuan (S$8.04 million) as higher costs offset the 5.6 per cent rise in revenue to 291.89 million yuan from sales of properties and rental income.