Singapore Corporate News - 19 Apr 2008

Guocoland's Q3 profit dives 93% to $2.6m

GUOCOLAND Ltd yesterday reported a 93 per cent plunge in third-quarter net profit to $2.6 million for the quarter ended March 31, down from $34.4 million a year ago.

Guocoland said that this was mainly due to a drop in gross profit to $11 million from $45.9 million, due to lower profit contribution from property development projects in Singapore and China.

Revenue also fell, down 27 per cent to $104 million from $143.4 million a year ago.

In its filing with the stock exchange yesterday, Guocoland said that it incurred an income tax expense of $6.9 million for the quarter, mainly due to an underprovision of $4.6 million for a completed and fully sold project in China arising from non-deductibility of certain expenses.

Guocoland also explained that in November 2007, it completed its acquisition of a 100 per cent interest in Hainan Jing Hao Asset Limited, which in turn held a 90 per cent stake in Beijing Cheng Jian Dong Hua Real Estate Development Company Ltd, the company undertaking the Dongzhimen project in Beijing (DZM Project).

To date, an aggregate of 3.22 billion yuan (S$650 million) of the purchase price of 5.8 billion yuan has been paid to the vendors of the DZM Project, Beijing Beida Jade Bird Company Ltd and its related corporations.

The balance has been withheld pending resolution of disputes, said Guocoland, which has projects in Singapore, China, Malaysia and Vietnam.

The company said that contraction in global economies, especially in the US, volatility in the global financial markets and rising global inflation would slow down the economies of Singapore and other Asian countries.

'The group has built up a solid base which will enable it to realise good growth and earnings from its landbank. Barring unforeseen circumstances, the group's results for the fourth quarter (ended June 30, 2008) will be substantially better than the third quarter (ended March 31, 2008).

'In view of the current market situation, the results for the full year ending June 30, 2008 are expected to be lower than the results for the previous year ended June 30, 2007.'

Inventory has increased to $3.8 billion from $1.6 billion, mainly due to a jump in Guocoland's landbank arising from completion of the en bloc acquisitions of Sophia Court, Palm Beach Garden, Leedon Heights and Toho Garden condominiums in Singapore and the acquisition of the Dongzhimen site in Beijing.

Earnings per share for the quarter, fully diluted, came to 0.31 of a cent, compared with 5.55 cents a year ago.

At the close of the trading day, Guocoland shares ended unchanged at $3.55 apiece.

A-Reit full-year distributable income rises 14.3% to $187.3m

ASCENDAS Real Estate Investment Trust (A-Reit) has reported gross revenue of $322 million for the full year ended March 31, 2008 - an increase of 13.9 per cent over the previous year.

Net property income for the year came to $243 million, up 15.8 per cent year on year.

Distributable income for the FY2007-08 totalled $187.3 million, up 14.3 per cent year on year, while distributable income per unit (DPU) was 14.13 cents, a 10.8 per cent rise. This also represents an annualised yield of 5.94 per cent based on the closing price of $2.38 per unit on March 31, 2008.

For the quarter, DPU was 3.69 cents, an increase of 11.8 per cent compared with the same period a year ago. This will be paid out on May 30, 2008.

A-Reit manager Ascendas Funds Management Ltd's CEO Tan Ser Ping attributed growth in net property income to 'positive rental reversion, active leasing and full-year contribution from prior year acquisitions'.

A-Reit now has 84 properties worth $4.2 billion, up from 77 properties worth $3.3 billion a year ago.

In the mandatory annual revaluation exercise conducted in March 2008, A-Reit also recorded a net appreciation of $494.1 million or 14.2 per cent over the book value of the properties (before revaluation) as at March 31, 2008.

In the year, A-Reit acquired seven properties and completed its third development project, HansaPoint@CBP, as well as two asset enhancement initiatives for a total of about $310 million.

The overall occupancy for A-Reit's portfolio of 84 properties stands at 98.4 per cent compared with 96.6 per cent a year ago. Occupancy rate for multi-tenanted buildings increased by 2.7 per cent to 96.4 per cent compared with a year ago. It said the increase in occupancy is partly due to the spillover demand from the tight office supply situation in the CBD and the continued inflow of multinational companies setting up or expanding operations in Singapore.

For the year, A-Reit renewed or leased a total of 274,061 sq m of space. On a year-on-year basis, it registered 46 per cent and 40.3 per cent for its renewal rental rates for the Business and Science Parks, and high-tech industrial sub-sectors.

For the year ahead, A-Reit manager Ascendas Funds Management said it 'expects to be able to deliver a DPU for the coming year that is in line with its recent performance'.

However, it did highlight a CB Richard Ellis report which expects the increase in rents and occupancy rates for high-tech and business parks space to continue at a 'less brisk pace due to limited upcoming supply'.

Yesterday, A-Reit's unit price fell two cents to close at $2.35 per unit.

M1's Q1 profit down 23.5% at $38m

STRUGGLING to stem its market share decline, MobileOne yesterday posted a first-quarter net profit of $38 million, 23.5 per cent down due to a tax adjustment.

M1, the smallest of the three listed telcos here, said that pre-tax profit rose 2.6 per cent to $46.8 million for the three months ended March 31. It said that net profit was lower at $38 million because the previous corresponding quarter benefited from a two percentage point cut in corporate tax rate to 18 per cent.

According to a poll by Bloomberg, the median profit estimate of three analysts was $40.5 million.
Earnings per share came to 4.3 cents, 14 per cent down from five cents previously.

Although M1 showed growth in sales and added more customers, it came with higher costs while market share continued to slide. At end-February, market share came to 26.5 per cent, down from 27.4 per cent at end-November and 28.9 per cent at end-February last year

M1 said that operating revenue grew 3.8 per cent to $203.9 million, driven by an increase in service revenue. Post-paid revenue edged up 4.9 per cent to $136 million, while prepaid revenue climbed 14.4 per cent to $17.1 million. International call revenue rose 8 per cent to $33.7 million as total international retail minutes increased 83.6 per cent to 112 million.

Handset sales continued to fall, down 16.2 per cent at $17.1 million as M1 cut prices. Operating expenses rose 3.7 per cent to $155.3 million while cost of sales was up 2 per cent at $77.1 million. Free cash flow fell 6 per cent to $59.5 million.

This year will be a kind of watershed for mobile phone players because full mobile number portability starts on June 13. M1 and StarHub, the No 2 player, are expected to launch major campaigns to make inroads into the much bigger customer base of Singapore Telecommunications.

Neil Montefiore, M1 chief executive officer, said: 'We expect the introduction of full mobile number portability in June will provide us an opportunity to target specific market segments but it may also result in a temporary increase in retention and acquisition costs. Overall, the company foresees its operations to remain stable for 2008.'

Separately, M1 said that it has picked Huawei Technologies to expand and upgrade its Singapore network.

The M1 counter closed two cents down at $1.93 yesterday on volume of 1.22 million shares.

BH Global Q1 net profit soars 24% to $5m

BH Global continues to ride the offshore marine industry boom in the first quarter, lifting profit $968,000 or 24 per cent quarter-on-quarter to $5 million.

Revenue jumped 21 per cent to $24.5 million, from $20.2 million previously, due to improved sales of marine electrical equipment and the group's strategy of increasing the size and range of its inventory.

Marine electrical equipment contributed 91 per cent to revenue. Within this segment, marine cables contributed 82 per cent and marine lighting, 18 per cent. Marine consumables made up the remaining 9 per cent of the group's overall revenue.

'Over the years, BH Global has moved up the value chain,' said managing director Vincent Lim. 'We are no longer just another distributor of electrical equipment. We have started to establish our position as a supply chain manager to ship owners, operators, chandlers and shipyards.

'The current business environment has created attractive merger and acquisition opportunities and we are keen to explore synergistic acquisitions, especially in Middle East and China, to enhance shareholder value.'

BH Global is looking to expand its range of offshore cables in view of large offshore projects like oil rigs and floating production and storage facilities that are coming on stream. The group said it is cautiously optimistic about business prospects in FY2008.

BH Global shares closed flat at 37 cents yesterday.

Takeover talk behind Super Coffeemix share surge

SHARES of food and beverage firm Super Coffeemix yesterday surged 26.7 per cent to close at $1.02 each on volume of 9.4 million units. The shares also jumped 20 per cent on Thursday, prompting queries from the Singapore Exchange. The company replied late on Thursday that it has received interest regarding a 'possible transaction' that is still in the early stage of discussions. Dealers said that there has been speculation of a takeover bid for Super Coffeemix.

SNP Corp's major shareholder weighing options on stake

SNP Corp said that it has been informed that Green Dot Capital (Private) Ltd, which owns some 54 per cent of the company, is evaluating options with respect to its stake in SNP. It cautioned that there is no assurance that any transaction would materialise from the evaluation. Further announcements will be released when appropriate, it added.