Singapore Corporate News - 27 Mar 2008

AusGroup wins A$12m Aussie offshore contract

ENERGY and resources specialist AusGroup has secured a new contract worth A$12 million (S$15.2 million) from an unnamed international offshore construction services client.

AusGroup will supply supervision and labour to the client for the offshore installation of a production platform topside, jacket and offshore pipeline on the construction work on the Montara offshore oilfield development project off the north-west coast of Australia.

Work is expected to start next month and scheduled for completion by October.

The latest deal brings AusGroup's contracts secured in less than two weeks to about A$38 million, taking its total order book to more than A$190 million.

'These new orders represent a new market sector for AusGroup,' said AusGroup managing director John Sheridan.

'It is a good start and we look forward to continue the growth.'

AusGroup is primarily based in Australia, where it is a supplier of total engineering solutions in the oil, gas and resource-mining sectors.

The new contract will provide it with exposure to the offshore construction services sector in Australia. AusGroup believes its ability to recruit specialist offshore personnel, as well as manage associated safety and industrial relations issues, puts it in good stead to secure additional offshore construction services-related contracts.

Just last week, the group announced a new contract from a 'blue-chip' client worth about A$26 million.

That contract - for which work is to begin in May and finish in December - came from a global mining resources firm and is for the fabrication, supply and installation of structural and mechanical piping and electrical systems for a new iron ore facility in Western Australia.

AusGroup also has in the pipeline plans to increase the output of its subsidiary Cactus Engineering, a manufacturer of subsea equipment, with the recent purchase of a new facility in Tuas.

For the half-year ended Dec 31, 2007, AusGroup's net profit hit A$12.1 million, an increase of 47 per cent. Revenue rose 60.4 per cent to A$202.2 million.

SP Ausnet upgrades earnings forecasts

Australian infrastructure firm SP Ausnet upgraded its earnings forecasts for the 2008/09 year yesterday, buoyed by higher revenues and a debt refinancing.

SP Ausnet, which owns and operates power transmission networks in Victoria state, said it expected net profit to be about 15 per cent higher than a forecast in its 2007 explanatory memorandum of A$147.5 million (S$187.4 million).

Distribution guidance of about 2.5 per cent growth in distributions per security remained unchanged.

SP Ausnet, which is 51 per cent owned by state-owned utility Singapore Power, said revenues would benefit from last month's decision on transmission charges by the Australian Energy Regulator, along with higher capital expenditure allowances.

Earnings would also be boosted by the refinancing of A$1.55 billion in debt and the finalisation of new interest rate hedges.

SP Ausnet last year pulled out of a plan to pay A$8.3 billion for assets of former energy firm Alinta, blaming a downturn in capital markets which would have increased the cost of the deal.

LMIR Trust makes maiden buy

LIPPO-Mapletree Indonesia Retail Trust (LMIR Trust) yesterday announced its maiden acquisition since its listing in November last year. The trust is buying Sun Plaza, a mall in Medan, North Sumatra, for $147.4 million.

The purchase will increase LMIR Trust's asset portfolio by 15 per cent to $1.15 billion, from $1.0 billion at present.

It will also increase total net lettable area (NLA) in the trust's portfolio by about 20 per cent to 376,035 square metres.

The acquisition will be funded 20 per cent with internal cash resources and 80 per cent with debt, drawing from a $125 million term loan facility granted by Deutsche Bank at an effective all-in cost of 6.89 per cent. The purchase takes LMIR Trust's gearing from zero to 10.2 per cent.
The property is the largest and only upmarket retail mall in Medan, Indonesia's third most populous city, the trust said. The mall has a land area of about 29,419 sq m and gross floor area and net lettable area of 87,188 sq m and 62,583 sq m respectively. It has a committed occupancy of 97.0 per cent for the month ending April 2008.

LMIR Trust said that there are further opportunities to improve the tenant mix at the mall to increase gross revenue and net property income.

It has identified and held preliminary discussions with many leading Indonesian and international retailers which are currently not represented at the new mall but are tenants of other properties in the trust's portfolio, the trust said.

After the acquisition, the trust's manager plans to explore various options to increase rentable area - such as increasing the net lettable area and reconfiguring the layout.

LMIR Trust listed on the Singapore Exchange in November 2007 with a portfolio of seven Indonesian malls and seven retail spaces in other malls. It sold some 645.5 million units at 80 cents each. The trust said then that it aims to triple its portfolio size to $3 billion by end-2009.

LMIR Trust's shares were last traded at 57 cents.

Full-year profit up 4% for Low Keng Huat

LOW Keng Huat yesterday announced a 4 per cent rise in net profit to $13.69 million, or 4.17 cents per share, for the financial year ended Jan 31. The increase was due to higher development profit from associated companies and hotel operations, offset by higher construction loss and higher taxation charge and minority interests. The property developer reported a 3 per cent dip in revenue to $113.32 million.

The company said it is cautiously optimistic about its business prospect notwithstanding the impact of the US slowdown on Singapore and the region.

Tee International wins contracts worth $109m

TEE International said yesterday it was awarded the contracts for North and South Podium electrical installation for Marina Bay Sands Integrated Resort Development by Marina Bay Sands Pte Ltd for a total sum of $109.01 million.

The completion time is 516 and 522 days for the North and South Podium respectively. The electrical engineering company said the contract is expected to contribute materially to the net tangible assets per share and earnings per share of the group for the financial years ending May 31, 2008, and May 31, 2009.

Abterra buying 49.9% of Shanxi Loudong

MINING and logistics company Abterra Ltd said it has agreed to buy 49.9 per cent of Shanxi Loudong General Nice Coking & Gas Co Ltd - a producer of coal and other by-products - from General Nice Resources (Hong Kong) Limited. Abterra will pay up to $180.92 million for the proposed stake. The purchase will be satisfied by the issue of up to about 1.95 billion new Abterra shares to General Nice Resources at 9.3 cents each.