Singapore Corporate News - 1 May 2008

CapitaLand profit hit by absence of fair-value gain

PROPERTY giant CapitaLand yesterday posted a 59.3 per cent year-on-year drop in first-quarter net profit to $247.5 million, from $608.1 million in Q1 2007 when the bottom line had been boosted by a $426.8 million fair value gain from the sale of 8 Shenton Way (formerly Temasek Tower).

The group said, however, that its assets under management (AUM) rose to $19.1 billion as at end-Q1 2008 from $14.6 billion a year ago. It now manages four listed real estate investment trusts and 13 private equity funds across Singapore, China, Japan, Malaysia and the Gulf Cooperation Council region.

CapitaLand also said in its Q1 results statement that it plans to originate new property funds in Asia, in particular China, following the increased institutional and private investors' interest for real estate investments.

The group is on track to grow AUM to $25 billion in three to five years. Its fund management arm, CapitaLand Financial, reported a 52.4 per cent year-on-year jump in Q1 earnings before interest and tax (Ebit) to $18.5 million.

Group revenue for the first quarter ended March 31, 2008, dipped 0.9 per cent to $631.3 million. Higher revenue from office and retail properties was offset by lower sales of development projects in Singapore. Singapore's share of CapitaLand's group revenue and Ebit slipped in Q1 this year against the year-ago period. The Republic made up 29.7 per cent of revenue in Q1 2008, down from 41.4 per cent in Q1 2007. Singapore's share of Ebit fell from 83.5 per cent in Q1 2007 to 55 per cent in Q1 2008.

At CapitaLand's annual general meeting on Tuesday, shareholders were told that 2008 full-year earnings are unlikely to match last year's $2.8 billion due to a lack of revaluation gains. However, the group should perform better at the operating level, chairman Richard Hu told shareholders.

In its results statement yesterday, CapitaLand said it expects sentiment in the Singapore residential sector to remain cautious until more stability emerges in global financial markets and economic conditions. 'However, earnings for our residential business in Singapore will be underpinned by brisk sales achieved in the last two years,' it added.

The group was silent on possible launches in Singapore this year, although it highlighted likely launches elsewhere, in China, Vietnam, Thailand and Kazakhstan.

Ebit from residential rose 11.7 per cent year-on-year to $151.5 million in Q1 2008, with the improvement contributed mainly by China, arising from marked-to-market gains on an investment.

Ebit from commercial strategic business unit fell 74.6 per cent to $138.6 million due mainly to the fair value gain for Temasek Tower in the same year-ago period. The retail SBU posted a 145.8 per cent jump in Q1 Ebit to $58.1 million largely on the back of unrealised forex gains arising from revaluation of US dollar-denominated loans as the Sing dollar strengthened against the US currency and the divestment gain of Xizhimen mall to CapitaRetail China Trust, but partly offset by higher operating expenses.

The Ascott Group's Ebit rose 35.3 per cent to $39.5 million, due largely to the portfolio gain from the divestment of the property at 6 Sarkies Road in Singapore and better revenue per available unit performance from Europe and Singapore operations.

CapitaLand also said that the group's net debt to equity ratio rose to 0.59 as at end-Q1 2008 from 0.5 as at end-Q1 2007. The group's gross debt stood at $12.4 billion as at end-Q1 2008 compared with $8 billion a year earlier.

Earnings per share fell from 21.8 cents in Q1 2007 to 8.8 cents in Q1 2008. Net asset value per share stood at $3.62 as at March 31, 2008, up slightly from $3.54 as at Dec 31, 2007.

On the stock market yesterday, CapitaLand closed 18 cents lower at $6.79.

SingPost Q4 net drops 10.6% to $34.5m

SINGAPORE Post posted a 10.6 per cent year-on-year fall in net profit to $34.5 million for the fourth quarter despite a 5.7 per cent rise in revenue to $119 million.

But for the full year ended March 31, net profit climbed 6.8 per cent to $149.3 million, with revenue up 8.4 per cent at $472.6 million. Q4 earnings per share fell to 1.793 cents from 2.014 cents.

What caused the Q4 fall in net profit was an 18.4 per cent or about $14.5 million jump in total expenses to almost $93 million. Besides the higher costs of labour, goods and administrative expenses, the period included a one-off impairment charge of $4.9 million for two properties.

The increase in full-year revenue was due to all business segments showing improvement.

Full-year mail revenue grew by 7.9 per cent to $365.3 million, underpinned by higher mail volumes and price adjustments.

Logistics revenue rose by 6.7 per cent to $68.6 million due to higher contributions from Speedpost, vPOST online shopping and shipping transactions, and warehousing, fulfilment and distribution.

Retail recorded a 10.8 per cent increase in revenue to $61.6 million, as increased contributions from financial services and retail products offset the decline in agency and bill presentment services.

Said Wilson Tan, SingPost's group chief executive officer: 'We will focus on enhancing productivity and efficiency to better support our business growth. Barring any significant changes, we expect operating costs to stabilise.'

SingPost has proposed a final dividend of 2.5 cents per share (tax exempt one-tier), unchanged from the previous Q4. This is to be paid on July 18.

Together with the interim dividends of 1.25 cents paid out for each of the first three quarters, the total dividend for the year will total 6.25 cents per share.

As part of its efforts to cater to consumers' needs, SingPost is looking into expanding its services and reach.

DMrocket, a one-stop direct mail centre, was launched during the year. SingPost also expanded its hybrid mail business into Hong Kong and Thailand.

It also launched two new remittance services - Visa money Transfer and Cashome to Indonesia and an investment fund with Prudential Asset Management.

Despite the fall in Q4 net profit, SingPost remains upbeat about its outlook.

'We will continue to implement strategies to drive revenue in our core business of mail and logistics and also continue to leverage on our retail network. We are re-purposing our post offices to reap better yield,' said Mr Tan.

'We believe the group is positioned to tackle the challenges ahead and also on track for continued growth.'

SingPost shares closed 0.9 per cent higher at $1.16 yesterday.

Cosco to be more careful in announcing new deals

STUNG by previous sharp reactions to adverse news about contracts, Cosco Corp (Singapore) has instituted a new policy of not announcing newbuilding contracts till after the first instalment has been paid. The solitary order cancellation for a US$202 million oil rig project last month caused a sharp sell-off in the company's shares.

Cosco went on to reiterate that all instalments due on the 113 new ship buildings it has currently have been received as at the close of books for the quarter, including the seven outstanding ones mentioned in an earlier Bloomberg report.

Reflecting the group's buoyant results, first-quarter net profit attributable to equity-holders doubled to $83.9 million. Turnover for the three months ended March 31 also doubled from $355.8 million to $717.7 million.

The key ship repair, shipbuilding and marine engineering division, which contributed 91 per cent of total revenue, had a robust growth in turnover to $653.1 million from $306.9 million previously. The rise came on the back of progressive revenue recognition for the group's healthy stream of high-value offshore marine engineering and ship conversion projects and also contributions from the shipbuilding segment, Cosco said.

Gross margin also improved from 26 per cent to 28 per cent as the group worked on raising revenue per ship repaired. Cosco plans to move up the value chain to focus on higher value-added jobs like tankers, chemical tankers and container ships. By percentage, revenue from ship repair has been halved from 42 per cent in the previous corresponding quarter to just 21 per cent in the first quarter of this year.

The group has a healthy year-to-date order book of US$7.09 billion for progressive delivery up to 2011. In line with this, Cosco is adding capacity and expansion plans are on track to support these projects. 'To support our growing order book, our capacity expansion is on track,' said Cosco Corporation president and vice-chairman Ji Hai Sheng.

While posting its 21st consecutive quarter of growth, Cosco is mindful of the challenges ahead and is preparing for them. The company recognises that rising steel and labour costs and a depreciating US dollar will be issues it has to face.

Already, steel prices and foreign currency movements have proved to be a double-edged sword as, under miscellaneous gains, the group posted an $18.2 million gain on sale of scrap metal but this was offset by an $18.4 million forex loss. This resulted in a 63 per cent fall in other gains to $6 million.

Cosco said that it would factor such rising costs in pricing for future projects and diversifying its forex exposure. Customers have so far 'been able to accept' a rise in prices, Mr Ji said. 'Set on an even keel with our multiple key earnings pillars of offshore engineering, ship repair and conversion and shipbuilding, our group is cautiously optimistic of our ability to sustain growth and profitability in 2008 even against the challenging backdrop,' he added.

Cosco shares closed eight cents higher at $3.16 yesterday.

CDL Hospitality Q1 available distribution surges

CDL Hospitality Trusts (CDLHT) has announced income available for distribution of $23.6 million for Q1 2008, a 91.5 per cent increase over the corresponding quarter last year.

CDLHT, a stapled group comprising CDL Hospitality Real Estate Investment Trust (H-Reit) and CDL Hospitality Business Trust (HBT), said income available for distribution per stapled security for the quarter rose 63.4 per cent year-on-year to 2.86 cents or 11.50 cents on an annualised basis.

Citing the 6.6 per cent year-on-year increase in visitor arrivals to Singapore in the first quarter of 2008, Vincent Yeo, CEO of M&C Reit Management Ltd, the manager of H-Reit, said: 'As Singapore's largest hotel owner by number of rooms, we are well positioned to take advantage of the very robust demand for transient accommodation in Singapore.'

Gross revenue for the quarter of $27.9 million was 55.1 per cent higher while net property income was $26.1 million, up 55.8 per cent.

Average occupancy rate for H-Reit's Singapore hotels - Orchard Hotel, Grand Copthorne Waterfront Hotel, M Hotel, Copthorne King's Hotel and Novotel Clarke Quay - actually fell marginally by 0.2 percentage points to 84.4 per cent.

However, Mr Yeo said this was more a function of the Reit manager, 'managing for RevPar (room revenue per available room) growth'.

Mr Yeo also revealed that its market mix had changed with more business being contracted through corporate clients.

Indeed, RevPar increased by 37.7 per cent from $151 in Q1'07 to $208 in Q1'08.

Average daily rate (ADR) of $247 was 38 per cent higher compared to the same period a year ago.

The Singapore Tourism Board's figures for gazetted hotels here in March show that the average room rate was estimated at $238, while the average occupancy rate was estimated at 87 per cent.

Mr Yeo said that it was also on track to make its forecast annual acquisitions of $200-$300 million.

In the quarter, Mr Yeo said that six of the 24 extended stay suites at the Grand Copthorne Waterfront Hotel were completed and the hotel has received positive responses from potential guests during the pre-marketing phase. All the suites will be launched officially by the end of this month.

Mr Yeo also added that 'service apartments are within its ambit', and he would not discount the possibility of acquiring a service apartment in the future.

At the end of yesterday's trading, CDLHT's unit price rose 6 cents to close at $1.92 per unit.

A-iTrust distributable hits $45.8m

ASCENDAS India Trust (A-iTrust) yesterday reported net property income of $60.5 million for the 12 months ended March 31, 2008 - up 51 per cent from $40.2 million the year before.

The improvement was driven by a 50 per cent jump in property income to $102.7 million year on year.

Distributable income for FY2007-08 was $45.8 million. This translated to distributable income per unit (DPU) of 6.09 cents, or 9 per cent higher than the forecast of 5.6 cents.

Based on a closing price of $1.04 a unit on March 31, the annualised yield was 5.86 per cent.

For Q4, DPU was 1.64 cents. With Q3's DPU of 1.5 cents, a total of 3.14 cents will be paid on May 28.

A-iTrust was the first Indian property trust listed on the Singapore Exchange - in August last year. Its portfolio comprised four Indian IT parks at end- March.

A-iTrust said its asset portfolio has grown and the performance of its properties has improved. The occupancy rate for the portfolio is 96 per cent, and the renewal rate of expired leases is 92 per cent.

The trust is maintaining a distribution forecast of 6.85 Singapore cents made for FY2008-09 in its listing prospectus.

Jonathan Yap, CEO of the trustee-manager, said: 'We remain focused on actively managing the portfolio's income stability and enhancing returns through organic growth.'

The trust will continue to develop the land it owns and acquire new assets in a yield-accretive manner, Mr Yap said. 'We aim to do so through an optimised capital structure.'

Gearing for the trust was 4 per cent at the end of Q4, leaving it with about $300 million of borrowing capacity for developments or purchases before gearing reaches 35 per cent.

JPMorgan rated A-iTrust 'overweight' in early April, with a target price of $1.54. The trust's units closed two cents lower at $1.18 yesterday.

Hi-P Q1 net soars 64% to $24.7m

CONTRACT manufacturer Hi-P International has reported a 63.7 per cent rise in net profit to $24.7 million, with sales rising 35.3 per cent to $270 million for its first quarter ended March 31.

Basic earnings per share rose to 2.78 cents from 1.7 cents a year ago.

Revenue growth of the plastic-component maker was broad-based, with revenue from the wireless product segment rising 43.4 per cent to $163.3 million and from the consumer electronics segment climbing 24.6 per cent to $106.7 million.

The wireless product segment contributed 60 per cent to turnover, while consumer electronics accounted for 40 per cent.

Gross profit also leapt 55.4 per cent to $48.8 million, thanks to a more profitable product mix as Hi-P undertook more value-added services for its customers.

As a result, gross margins improved by 2.4 percentage points to 18.1 per cent - its highest since 2006.

Operating profit more than doubled to $34.3 million, as operating expenses fell 7.4 per cent due to reversions of excess bonuses accrued in FY2007, lower provisions for doubtful debts and greater cost efficiency.

However, Hi-P incurred currency losses of $7.1 million due to a weakening greenback.

'This was exacerbated by the record level of US dollar-denominated receivables that were converted during the quarter,' said Hi-P.

Said executive chairman Yao Hsiao Tung: 'Our customer diversification efforts, our past investments, our restructuring efforts, and the continuing improvements to our controls and processes are paying off.

'Not only are we able to deliver better margins, we have also significantly enhanced our working capital management; our gross cash position has reached $115.2 million - a record for the company.'

Looking ahead, the contract manufacturer said that Q2 net income and sales could be sequentially lower due to slower sales expected from its consumer electronics business. But Q2 revenue and profit are expected to be better than those of Q2 2007.

On a full-year basis, it forecasts higher revenue and profit.

Credit Suisse yesterday issued an 'outperform' on the stock with a target price of 80 cents. The shares gained three cents to close at 54 cents yesterday.

Keppel Land in Pearl River Delta project

KEPPEL Land said yesterday that it is developing a waterfront residential pro-ject in China's Pearl River Delta region.

Keppel Land is taking an 80 per cent stake in Sunseacan Investment, a Hong Kong company that will undertake the development. The remaining 20 per cent will be held by Sunsea Yacht Club, another Hong Kong company and the former owner of Sunseacan Investment.

Keppel Land had earlier announced that it was buying an 80 per cent stake in Sunseacan for HK$50 million (S$8.74 million) in cash. It will hold the stake through a subsidiary.

The luxury complex will be 35 km from Zhongshan city in Guangdong province and will cover 82 hectares. When completed, it is expected to yield about 300 villas with private berths on the Xijiang river and 2,500 condominium units and serviced apartments, with a total gross floor area of 408,000 sq m.

There will also be restaurants, berths for 550 boats and other recreational facilities.

Keppel Land's group chief executive officer Kevin Wong said: 'Waterfront living has become a worldwide trend. Keppel Land is confident this integrated development will present a new and refreshing lifestyle to home-buyers in China.'

Keppel Land said the deal is not expected to have a material impact on its consolidated earnings per share or net tangible assets per share for the current financial year.

Astra net rises 76% on vehicle, palm oil gains

PT Astra International, Indonesia's biggest publicly traded company by sales and 50 per cent owned by Singapore's Jardine Cycle & Carriage Ltd, said first-quarter profit rose 76 per cent on higher car and motorcycle sales and rising palm oil prices.

Net income climbed to 2.25 trillion rupiah (S$333 million) from 1.28 trillion rupiah a year earlier, the company said in a statement. Sales gained 47 per cent to 21.78 trillion rupiah.

Astra's first-quarter car sales rose to their highest in three years, benefiting from cuts in central bank borrowing costs. The company, which accounts for half of all cars sold in Indonesia, also gained from rising palm oil and coal prices.

The earnings are 'healthy enough in terms of growth as main sectors - vehicle sales, palm oil prices - are still growing,' said Jerome Jovellana, an analyst at PT Mandiri Sekuritas. Still, 'with oil prices rising, maybe growth may not be as high as in the first quarter'.

Astra sells Toyota's Avanza and Innova multi-purpose vehicles through 58 outlets in Indonesia. It also sells Honda motorcycles.

Astra's 'earnings momentum and earning visibility should remain strong in 2008,' Wilianto Ie, an analyst with CLSA Ltd said in a note to investors on April 14. The company's shares, which have fallen 27 per cent this year, lost 0.3 per cent to 20,000 rupiah yesterday. Earnings were announced after the market closed.

Higher Suntec Reit distribution

SUNTEC Real Estate Investment Trust, one of Hong Kong billionaire Li Ka-shing's two property trusts in Singapore, said it will distribute S$37.6 million to investors for the second quarter ended March 31 after rents at its properties rose.

This is 34.2 per cent higher than for the year-ago period. The trust, which owns offices and a shopping mall in Singapore, will distribute 2.5185 Singapore cents a share for the three months, up 26 per cent.

DBS appoints new CEO as a group director

DBS Group Holdings has appointed new chief executive Richard Stanley as a director of the group. He joins the bank today, replacing Jackson Tai who stepped down at the end of last year. Mr Stanley, 47, was Citigroup's country officer for China, based in Shanghai.

New appointments at Straits Trading

WELL-KNOWN former banker Elizabeth Sam, 69, has been appointed an independent director of The Straits Trading Company. Mrs Sam previously held senior positions in the Ministry of Finance, the Monetary Authority of Singapore, and OCBC Bank.

The company also announced the appointment of David Goh Kay Yong, 46, the deputy chief investment officer of controlling shareholder Tecity Group, as a non-independent director. Straits Trading recently named Chew Gek Khim, who heads Tecity, as its new chairman.

Excelpoint Q1 income falls 19.3%; sale up

EXCELPOINT Technology has reported a 19.3 per cent year-on-year drop in net income to US$113,000 even though sales rose 10.2 per cent to US$124.6 million for the first quarter ended March 31, 2008.

Singapore Corporate News- 28 Apr 2008

Yangzijiang eyes over 50% jump in earnings

CITING expansion plans, robust order books and existing strong fundamentals, Yangzijiang Shipbuilding is confident of sustaining earnings growth of more than 50 per cent this fiscal year and the next.

The management of the Chinese shipbuilding company was in Singapore last week for a roadshow presentation and an annual-cum-extraordinary general meeting with shareholders.

In his first interview with the Singapore media since the company listed here in April last year, Yangzijiang chairman Ren Yuan Lin said the group's shipbuilding capacity is expected to jump by a stunning two million deadweight tonnes (dwt) from the current 300,000 dwt by end-2010 when a phase two expansion programme at its newly acquired yard is completed.

At the same time, the group is considering raising capacity at its existing shipyard at Jiangyin City by 20 per cent.

Last month, Yangzijiang indirectly acquired a 24.81 per cent equity interest in Jiangsu New Yangzi Shipbuilding Co (JNYS) for $517.67 million via cash, loan and a share issue, which raised its equity interest in JNYS to 100 per cent.

JNYS owns a new yard in Jiangyin Economic Development District in Jingjiang City in Jiangsu, which is currently undergoing first-phase expansion to a capacity of 1.2 million dwt next year.

'We expect to see double-digit growth of more than 50 per cent from a year ago or even 80 per cent, and our confidence is based on the expansion plans that we have, the robust order books and current operations,' Mr Ren said in Mandarin.

Last year was a rosy one for Yangzijiang - its net profit almost doubled to 869.51 million yuan (S$169 million) from 454.34 million yuan a year earlier on the back of a 66 per cent jump in revenue to 3.86 billion yuan derived mainly from its shipbuilding activities.

'Our order books are packed to 2011-2012, which ensures that within the next five years, our shipyards are full,' Mr Ren said. This will help the group tide over any industry downcycle for the next five years. Although the group has only received two shipbuilding contracts in the first quarter, Mr Ren said it is confident of meeting its full-year order target of 50 vessels worth US$2.2 billion.

Besides increasing its shipbuilding capacity, Yangzijiang is looking to acquire contractors that are currently doing outsourced fabrication work for the group. Such a consolidation, to keep its costs within its internal operations, is expected to bring its operating costs down by two percentage points.

In view of likely better margins from building larger vessels at JNYS and hedging measures against the strengthening yuan, Mr Ren said the group is confident of keeping its gross profit margin steady around 20 per cent. This is also despite the current challenges of rising steel prices, the weakening US dollar and labour costs having risen 10 per cent each year.

'We make some upfront payment to steel suppliers and upon receiving the supplies, we receive a discount on the balance payment,' Mr Ren said.

Assuaging fears of any cancellation of contracts should customers fail to pay, he emphasised that Yangzijiang is unlikely to face such an issue. This concern was raised since its rival Cosco Corp announced the cancellation of a US$202-million project to build a GM5000 semi-submersible rig hull for Norwegian owner Red Flag because the customer failed to pay the required deposits for work to start.

'All our announced orders have at least 40 per cent of the payment being locked in,' Mr Ren explained. 'Clients have to pay 20 per cent of deposit upon the signing of the contract and another 20 per cent in bank guarantee.'

Shares of Yangzijiang were dragged along by the bad news from Cosco two weeks back. Mr Ren obtained shareholders' approval for a mandatory share buyback of up to 10 per cent at the EGM last Friday to lend support to its share price, which he perceived to be undervalued.

The stock climbed two cents, or 1.9 per cent, to $1.10 after an active trade of 58.09 million shares last Friday.

Novo aims to be major player in steel trading

MARKET debutant Novo Group expects to emerge as one of Asia's - and possibly the world's - most prominent steel trading groups in short order.

The company, whose shares start trading on the Singapore Exchange this morning, said it was already riding on the strong growth in global trading of semi-finished and finished steel products.
Novo counts steel industry 'big boys' such as Arcelor Mittal, Cosipa Group, Reliance Steel and Tianjin Iron & Steel Co amongst its clients.

Dicky Yu, Novo's executive chairman, sees Novo's successful placement as a sign of investor confidence in the company's prospects. He also likens his company to a 'mini-Noble Group' in the making. Mainboard-listed Noble is a successful global commodities trader.

'After crude oil, steel is the world's second largest traded commodity and Novo is at the heart of the steel business,' he said. 'We believe that the strong response to our IPO placement is a testimony to Novo's sound business fundamentals, clear profit growth strategies and the positive outlook in the global steel industry.'

After initial delays amid jittery market conditions, Novo managed to place out all its 146 million new ordinary shares, including 4.4 million shares to UOB Kay Hian as settlement of placement commission, at a price of 20 cents per share.

Amongst Novo's key investors is mainboard-listed HG Metal Manufacturing, one of South-east Asia's largest steel stockists, which took up 10 million placement shares.

Mr Yu added that Novo, which was created from the reverse takeover of Neocorp International, was well placed to ride on the uptrend in steel trading.

He said Novo's reach spanned the entire spectrum of the industry - from mines and iron/steel mills, to stockists and end users. 'Our integrated business model enables us to add value to customers, and provides us better margins.'

The company raised $28.4 million in net proceeds from its IPO which will fund its expansion plans; and fulfils the required minimum shareholding spread to maintain Novo's listing status. In addition, Mr Yu revealed that his company has also secured banking facilities of over US$300 million to provide additional funding to scale up its operations.

'We have the working capital to enable the company to grow even faster and stronger,' he said.

For the 12 months ended April 30, 2007, Novo chalked up net profit of US$7.3 million on a revenue of US$310.9 million. For the five months ended Sept 30, 2007, it reported a 96 per cent rise in revenue to US$211.5 million, from US$107.7 million for the corresponding period the previous year, with net profit almost quadrupling to US$5.7 million, from US$1.5 million.

Luck plays a part in success: Noble founder

In an office full of modern Chinese paintings overlooking Hong Kong's Victoria Harbour, Richard Elman, founder and head of Asia's largest commodities supplier Noble Group, says he has been lucky.

Mr Elman, who began his career in a scrap yard in England at the age of 15, is among the few non-Chinese listed by Forbes magazine as the wealthiest in town.

'I've just been lucky... being in the right place at the right time,' Mr Elman said, adding he has always believed in fate.

Noble, which he set up 21 years ago with his savings of US$100,000, is capitalised at around US$4.8 billion.

It supplies raw materials from coal, iron ore to coffee, chartering more than 100 ships at any given time. Its assets stretch from iron ore reserves in Brazil and ports in Argentina, to coal mines in Indonesia and soy crushers in China.

Fuelled by surging demand from Asian countries such as China and India, Noble's net profit spiralled to US$258 million by 2007, rising more than 10-fold since 2000.

'I never had any great ambition. I did it for fun, because I enjoyed it, and to make a living. That's what I still do,' he said last Friday, sipping his tea, relaxed in an open white shirt with beige Chinese bead bracelets dangling from his arm.

Mr Elman, 67, said nobody knew much about commodities when Noble was established. The company moved its stock listing in 1997 to Singapore from Hong Kong, where they felt they had not been understood and appreciated.

'We started in the years when nobody even talked about commodities,' he said. 'We built the company during years of disinvestment, very tough years.' Noble has expanded through economic downturns, taking over a series of companies in financial difficulties such as Andre & Cie SA from Switzerland, once one of the world's top five grains traders, earlier this decade.

Noble prides itself on building pipelines from production to consumption, controlling and profiting from every link in the supply chain of raw materials, including ships and warehouses.

'At the beginning we could sit with two telephones and make a living. But over the years that disappeared,' he said.

'We don't have to actually own the assets but to secure more long-term marketing rights we bought some assets.'

Mr Elman said he hoped Noble would be larger and more professional in five years. It already employs more than 10,000 people and has over 100 offices in 40 countries.

'The company has grown about 20 per cent every year in physical volume,' he said. 'For us to increase physical capacity gives us the ability to work with very tight margins.'

Combining its business and geographical presence, the company is expanding rapidly into new businesses, such as biofuels and carbon credits. It had a market share of 28 per cent in certified emission rights to the carbon credit market last year.

Despite Noble's growing ethanol business, Mr Elman said he was not fully convinced about biofuels, which many countries have promoted with generous subsidies. 'I am selectively convinced,' he said. 'Ethanol works in Brazil. There's no question about it. (But) if you look closely at biofuels around the world, it often has its challenges.'

One area of potential expansion is uranium, which has seen prices soar to historic highs in the past five years, due to a nuclear power renaissance in the face of energy shortages and global warming caused by greenhouse gas emissions.

'I think the future energy requirements of the world will come from nuclear,' he said. 'We'd start with (uranium) mining ... if they're the right price, we'll pursue them.' Mr Elman said Noble would look at each opportunity and there was no shortage of offers coming its way, even though some of the easier targets had already been taken.

'There's consolidation in all these industries. We live off the crumbs of the big boys, which could develop into loaves of bread.'

As a teenager in the 1950s, Mr Elman started out sorting non-ferrous scrap metal after dropping out from school in London. His barrister father and his mother, who made women's clothes, got him his lucky break into the business.

He first landed in Hong Kong in 1968 as a metal merchant for a US company. Following a stint in New York, he returned to Hong Kong to set up his own company after leaving Phibro, now part of Citigroup Corp.

Elman moved commodities in and out of China in the 1970s, when it was ruled by Chairman Mao Zedong. He was the first to sell China's Daqing crude oil to the United States.

Asked for his key to success, Mr Elman said: 'Don't forget where you came from. Don't forget your origins. Don't forget you're fallible. Respect people, trust people.'

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.

Singapore Corporate News - 25 Apr 2008

Venture Corp profit slumps 20.3% in Q1

MAJOR losses from collateralised debt obligation (CDO) investments continue to dent Venture Corporation's profits, pulling its net income down by 20.3 per cent in the first quarter of this year.

Net profit attributable to equity-holders for the three months ended March 31 fell to $56.3 million from $70.7 million a year earlier. The plunge was attributed largely to a mark-to-market charge of $20.7 million from Venture's CDO investments that were hit by the US credit crunch.

'This (fair-value) adjustment is quite significant. Without this, the results would have been quite favourable,' Venture chairman and chief executive Wong Ngit Liong said at its results briefing yesterday.

'It's unfortunate that many years ago our previous CFO went into this (CDO investment). It's something we shouldn't have gone into but we will deal with it and manage it,' he said.

Venture's first-quarter revenue dipped 3.1 per cent to $939.1 million compared with the previous corresponding period, while Q1 earnings per share dropped to 20.5 cents from 25.9 cents a year earlier.

Although the company's revenue is fully pegged to the declining greenback, Mr Wong said Venture has not suffered major losses because it has been 'managing its foreign exchange well'. For Q1 2008, it had a foreign currency exchange adjustment gain of $4.1 million, lower than the previous Q1's $6 million.

'We are quite prepared for any further decline in the US dollar of up to 5 per cent. We have all the mechanisms to ensure that we can come out favourably,' Mr Wong said.

And while the US is on the fringe of a bear market, Mr Wong maintains that there has been no 'adverse impact' on Venture's business so far. 'Most of the impact has been felt in the consumer area. We do very little business in the consumer space,' he explained.

Venture makes printers for Hewlett-Packard, as well as testing equipment for Agilent Technologies and point-of-sale solutions for companies like NCR Corp.

In Q1, sales from the company's printing and imaging business suffered a 19.7 per cent drop due to product delays. However, this segment continues to be the main income driver, accounting for 25.6 per cent of the quarter's turnover.

Computer peripherals and data storage products contributed 20.2 per cent, while retail solutions and industrial offerings took up 19.5 per cent. Networking and communications accounted for 18.3 per cent of sales and the remainder was made up of products like test and measurement tools, as well as medical devices.

Venture said it is 'cautiously optimistic' about its prospects, adding that signs from customers point to a favourable outlook for the rest of 2008.

'There are signs that volume is coming. We have seen signs that things are recovering towards the end of the first quarter,' Mr Wong said.

Venture shares closed 1.8 per cent down at $11.72 yesterday.

Keppel Land Q1 net profit down 3.5%

KEPPEL Land yesterday posted net earnings of about $60.3 million for the first quarter ended March 31, 2008, down 3.5 per cent from the corresponding period last year.

Earnings per share for the quarter fell to 8.4 cents from 8.7 cents.

The results were helped by a $23.1 million writeback of provisions made earlier for properties held for sale, mostly on Park Infinia at Wee Nam condo which received Temporary Occupation Permit at the end of Q1 2008. For Q1 2007, the writeback of provisions for properties held for sale was $13.34 million lower at $9.76 million.

Profit after tax and minority interest (Patmi) from property trading fell 13.1 per cent to $49.1 million due to the completion of several projects in Singapore and overseas, and reduced profit contribution from Marina Bay Residences (which was being developed by an associated company). In Q1 2007, an initial 20 per cent profit for this project was recognised upon signing of the sales and purchase agreements. Keppel Land also said that property trading posted a lower contribution in Q1 2008 as launches were held back due to market conditions brought on by US sub-prime problems.

Patmi from property investment fell by 33.9 per cent to $7.6 million in Q1 2008.

However, fund management activities achieved a higher Patmi of $4.2 million in Q1 2008 compared with $0.7 million in Q1 2007, on the back of higher management fee income from a larger portfolio of assets under management by K-Reit Asia (arising from the acquisition of a one-third stake in One Raffles Quay) and Alpha Investment Partners.

Keppel Land's Q1 sales slipped 7.6 per cent year-on-year to $273.1 million. The lower turnover was due largely to the completion of Urbana and The Belvedere in Singapore, as well as The Waterfront in China during the last financial year, and hence no sales were recognised in Q1 2008, Keppel Land said.

The group will monitor the market closely and launch Marina Bay Suites and the second phase of Reflections at Keppel Bay 'when market conditions are more favourable', the company said in its results statement.

In late January, it had indicated that Marina Bay Suites would be launched after Chinese New Year, within the first quarter. That itself was a delay from the earlier launch target of before Chinese New Year.

Keppel Land said that Jakarta Garden City, a gated residential township in eastern Jakarta was soft launched early last month and 76 per cent of the initial 191 landed homes released have been sold. In India, marketing is slated to begin in the second half of this year for Elita Horizon, a 1,142-unit condo in Bangalore.

As reported earlier, over 50 per cent of the 2.9 million square feet of total net lettable area at Marina Bay Financial Centre (MBFC) have been pre-committed. Over the last few months, about 150,000 sq ft were taken up, mainly by Barclays and Amex.

Keppel Land said that its other upcoming Ocean Financial Centre has secured financing at an attractive rate and appointed the main contractor.

OSIM narrows Q1 loss to $13.2m

OSIM International posted a net loss of S$13.2 million, or 2.44 cents a share, for the first quarter ended March 31 this year.

The first-quarter deficit was about 24 per cent lower than in the previous corresponding period, when the net loss was S$17.3 million or 3.19 cents a share.

But the loss for the healthy-lifestyle products group was a turnaround from the S$30.17 million net profit it saw for Q4 ended Dec 31 last year.

Q1 revenue slipped to S$115.6 million from S$121.3 million a year earlier.

OSIM's Q1 share of losses from associated and joint-venture firms fell to S$12.7 million from the previous corresponding period's S$14.4 million.

The group, which equity accounts the results of OSIM Brookstone, said the US unit's Q1 revenue rose 8 per cent to US$89.8 million. The unit reported a loss of US$13 million from continuing operations, up from the previous corresponding period's US$11.7 million loss.

Brookstone achieved its eighth consecutive quarter of same-store growth.

OSIM is upbeat about Brookstone's future, as its closest competitor in the US market, Sharper Image, recently declared bankruptcy.

'Now there is a clear path and opportunity to build our business in the US for the mid to long term,' said OSIM's chief financial officer Peter Lee.

To achieve better profitability, OSIM has begun a programme to rationalise smaller, unproductive outlets and down-size bigger stores.

It hopes to open more stores in China - its number one market, which now accounts for 20 per cent of overall turnover.

'We are optimistic about the group's performance in 2008 despite challenging global conditions,' said OSIM chief executive Ron Sim. 'We will continue to develop our long-term plan to establish a global healthy lifestyle retailing business.'

'As with any longer-term endeavour, some short-term volatility in performance from quarter to quarter is inevitable. Barring unforeseen circumstances, the group expects profit after tax in FY 2008 to be higher than FY 2007,' he added.

OSIM shares closed half a cent up at S$0.315 yesterday.

CAO (S) gets 309m yuan asset injection

CHINA Aviation Oil (Singapore) has finally received its first asset injection - under an earlier rehabilitation deal - from its Chinese parent. This is a 49 per cent stake, worth 309.4 million yuan (S$59.9 million), in China's longest multi-oil pipeline, supplying Tianjin and Beijing airports, the latter being China's biggest jet fuel consumer.

And there could be more assets coming. CAO chairman Lim Jit Poh told BT 'there is nothing on the table yet' as far as asset injections from its other shareholder British Petroleum (BP) is concerned, but 'this doesn't mean we are not looking at some'.

CAO said it signed the agreement for the injection of 49 per cent of China Aviation Oil Tianjin Pipeline Transportation Centre (TSN-PEK) with parent China National Aviation Fuel (CNAF) yesterday.

The acquisition price is based on the valuation of 100 per cent of TSN-PEK at 631 million yuan. Based on its forecast FY2008 net profit of 47.3 million yuan, this represents a PE ratio of about 13 times.

TSN-PEK, headquartered at Tianjin Airport, currently transports about 88 per cent and 41 per cent of Beijing and Tianjin airports' respective jet fuel requirements.

The asset injection comes under an earlier, non-binding memorandum of understanding signed by parent CNAF and oil giant BP in December 2005 as part of CAO's rehabilitation effort. CAO ran into trouble in 2004 when it racked up US$550 million of losses from speculative trading of oil options.

CNAF president Sun Li told a news conference here: 'CNAF decided to divest 49 per cent of its interest in TSN-PEK to CAO to honour its commitment to inject suitable synergetic assets into CAO. CNAF's willingness to accept new CAO shares as full or part of the consideration also signifies our continued support for CAO and is testament to our confidence in CAO's business and growth prospects.'

The consideration for the deal will be either cash or the issuance of 37.07 million new CAO shares representing 4.88 per cent of CAO's enlarged issued and paid-up capital - or a combination of both.

The issue price of $1.6128 per share was derived from the average traded price of CAO shares in the 20 market days preceding the agreement.

CAO chairman Mr Lim said: 'We consider TSN-PEK to be a good-quality asset, given it currently has the exclusive rights to transport jet fuel from Tianjin Nanjiang Harbour to Beijing Airport via its pipeline, which is currently the most cost-effective means of transporting jet fuel to Beijing Airport.

'TSN-PEK will have steady income streams from its pipeline business, as Beijing Airport at present has the highest jet fuel consumption volume in China. There is also high potential of maximising the capacity of the 185km pipeline.'

Last year, the pipeline transported 2.3 million tonnes of oil, and is operating at 71 per cent capacity. This means it can handle even more jet fuel as demand grows at the two airports it serves, and TSN-PEK is expected to have enough capacity until 2010.

Mr Lim said the deal took 6-9 months to conclude. 'BP and independent directors including myself had a look first at the asset, which we felt was viable. We followed this up by doing our due diligence, appointing KPMG as our financial adviser and Stamford Law as our legal adviser in the process.'

CAO's 49 per cent stake in TSN-PEK is its second in a jet fuel pipeline in China, where it also has a 33 per cent stake in Shanghai-Pudong International Airport Aviation Fuel Supply Company.

In a separate announcement last night, CAO said independent director Lee Suet Fern has resigned from its board. Mrs Lee said in a letter that she enjoyed the cordiality of board directors but added: 'However, it has become, as a result of the company's approach to information flow and the management of decision making, review and oversight, increasingly difficult for me to properly discharge my duties as an independent director of the company.'

SingTel to open 5th data centre at Kim Chuan

A NEW SingTel data centre as big as 125 five-room HDB flats will open at Kim Chuan in 2010. And it promises to be one of the world's most advanced, as well as environmentally friendly.

SingTel says the 150,000 sq ft facility - its fifth in Singapore - will go up next to its existing data centre at Kim Chuan.

The Kim Chuan Telecommunications Centre 2 (KCTC-2) will offer managed hosting services to corporate customers when it opens in early 2010. Through managed hosting, a facility or computing equipment is leased by businesses to run their IT operations. The provider also supports clients in running their IT operations.

KCTC-2 will swell SingTel's data centre capacity in Singapore to more than 500,000 sq feet.

A notable feature of the centre is that it will comply with the Building and Construction Authority's Green Mark scheme, which evaluates buildings based on environmental friendliness and energy efficiency. KCTC-2 will be the first SingTel data centre to comply with these criteria.

It will also adhere to data centre consultant Uptime Institute's Tier-4 standard, which is widely recognised as the industry's most stringent data centre standard.

According to SingTel corporate communications manager Dylan Tan, KCTC-2 will be the first SingTel data centre to achieve such a rating.

Data centres that are rated Tier-4 - Uptime's highest rating on its scale of four - must have fail-safe measures such as multiple power and cooling equipment systems, advanced fire suppression systems and other protection. These provisions ensure a centre remains operational under almost all conditions.

Bill Chang, SingTel's executive vice-president for business, said SingTel expects strong demand for KCTC-2's facilities. He said its strategic location, state-of-the-art infrastructure and well-rounded offerings will be key selling points.

The local market for managed hosting services is expected to be bullish, according to SingTel. It says the growth of high-performance computing and Singapore's Intelligent Nation 2015 (iN2015) government initiative will drive demand for new data centre facilities.

First Ship Lease Trust to pay out US$12.95m in Q1

DIVERSIFIED shipping trust First Ship Lease (FSL) Trust has announced a distribution of US$12.95 million for the first quarter ended March 31, 2008 - working out to 2.59 US cents per unit.

There were no comparative figures for the previous corresponding period as FSL was constituted and listed in March last year. Compared with the preceding fourth quarter's 2.42 US cents, the Q1 DPU of 2.59 US cents was 7 per cent higher. This came as FSL added ships to its portfolio.

Q1 revenue rose 10.1 per cent from Q4 to US$16.6 million as the impact of the purchase and concurrent leaseback of two product tankers from Groda Shipping and Transportation in November was fully realised during the quarter.

The distribution translates into an annualised DPU of 10.36 US cents, 7 per cent higher than the annualised DPU of 9.68 US cents in the preceding quarter. Based on FSL Trust's closing unit price of S$1.10 on April 22, this translates into a distribution yield of 12.7 per cent per annum.

Trustee manager FSL Trust Management (FSLTM) said it will continue to pursue acquisition opportunities as part of its strategy to grow the trust. To support this effort, it has broadened the transaction origination platform by hiring a head of sales (East of Suez), who is joining the management team next month.

FSLTM is confident of achieving the previously announced acquisition target of US$300 million for financial year 2008. In fact, with the recent US$140 million Geden Lines transaction involving two Aframax class crude oil tankers announced earlier this week, about 50 per cent of the acquisition target has already been achieved.

'In view of the greater difficulty in raising conventional bank financing in the current tight credit environment, ship operators are turning increasingly to alternative financing solutions such as leasing. We are bullish in meeting the balance of the acquisition target of US$160 million over the next eight months of this year,' said FSLTM chief executive officer Philip Clausius.

Funding for these future acquisitions will be from the newly secured US$200 million credit facility, of which about US$150 million remains undrawn.

Ascott Trust Q1 payout per unit up 47%

ASCOTT Residence Trust (ART) achieved a unitholders' distribution of $14.17 million for the first quarter ended March 31 - a 76 per cent rise from a year earlier. And distribution per unit (DPU) rose 47 per cent to 2.33 cents.

The trust said its serviced residences continued to benefit from strong demand for accommodation from business travellers in Asia. The improved operating performance of its properties and contributions from new acquisitions also boosted its performance.

Serviced residences posted 15 per cent growth in revenue per available unit (RevPAU) overall, led by a strong RevPAU increase of 29 per cent in Singapore and higher RevPAU in China, Indonesia, the Philippines and Vietnam.

In addition, rental housing properties in Tokyo have performed well since they were acquired in December last year, achieving average occupancy of about 90 per cent, according to ART.

'We will continue to focus on maximising asset yields to drive organic growth and making yield-accretive acquisitions to deliver stable and growing returns to unitholders,' said Lim Jit Poh, chairman of Ascott Residence Trust Management Ltd.

Added Chong Kee Hiong, ARTML's chief executive officer: 'Our strategy of maintaining a balance of properties in stable as well as emerging markets in the Pan-Asian region will continue to provide a high degree of income stability for the portfolio.'

Upon completion of its latest acquisition in Perth, expected in the current Q2, the trust's portfolio will expand to $1.52 billion, comprising 37 properties with 3,550 units in 11 cities across seven countries.

SP Chemicals profit slides 14% in Q1

SP CHEMICALS has reported a 14 per cent decline in first-quarter net profit to 68 million yuan (S$13.2 million). This was despite revenue rising 61 per cent to 686 million yuan for the three months ended March 31.

Dayen in 1.1b yuan Inner Mongolia deal

DAYEN Environmental yesterday said it has signed a memorandum of understanding to invest in a 50 per cent stake in five sewage treatment plants and water supply infrastructure with Hohhot Chunhua Water. The deal, estimated to be worth 1.1 billion yuan (S$213 million), is facilitated by The Great Town Group. The investment in Inner Mongolia includes five sewage treatment plants scheduled for completion by the year's end, and a water treatment and delivery infrastructure. Dayen also said that The Great Town Group executive director Kam Yu has subscribed for a placement of 12 million Dayen shares.

Frasers Centrepoint Trust distribution up

FRASERS Centrepoint Trust has posted a 17 per cent rise in Q2 distributable income to $12 million. For the three months ended March 31, distribution per unit is 1.75 cents, up from 1.67 cents a year ago.

Singapore Corporate News - 23 Apr 2008

Hyflux wins bid for $632m desalination plant in Algeria

SINGAPORE'S water-treatment specialist Hyflux has won the bid to build and operate a $632 million seawater desalination plant in Algeria. The project raises its order book to $1.5 billion.

With a capacity of 500,000 cubic metres a day, the plant is said to be the world's largest using reverse osmosis technology. Construction begins in 2009 and should be completed by 2011, the company said. Its concession for the design-own-operate-transfer project is for 25 years.

Hyflux will take a 51 per cent stake through MenaSpring, its wholly owned subsidiary, in a joint venture company to be set up. Algeria Energy Company (AEC), the Algerian government firm handling power and water privatisation, will own the remaining 49 per cent.

AEC has arranged financing for about 70 per cent of the estimated project cost of US$468 million from Algerian banks at a 'very low' rate of 3.75 per cent, said Hyflux chief executive officer Olivia Lum at a press conference.

She added that Hyflux may divest some of its stake in the joint venture because of its asset-light strategy. 'We are always looking to divest at the right time. There is a clause that we are able to do so.'

Hyflux chief financial officer Sam Ong said the project would be 'very profitable because of the low interest rate', despite the very competitive tariff rate the company bid.

He said Hyflux will initially invest $80 million and expects EPC (engineering, procurement and construction) revenue of $600 million from 2009 to 2011. After which, Mr Ong said, it expects to book $60 million every year in revenue from operating and maintaining the desalination plant.

By comparison, according to analysts, its wastewater treatment plants in China each bring in between $1 million and $3 million a year in operating revenue.

By 2009, according to Mr Ong's estimates, the Middle East and North Africa will make up almost half of Hyflux's revenue. Last year, revenue from the region was just 7 per cent of the total $192.8 million. 'Algeria is the third largest market in the world for desalination,' Mr Ong noted.

Hyflux is also now developing a US$238 million desalination plant in Tlemcen in Algeria, with capacity of 200,000 cubic metres a day. Six per cent of the EPC work has been done two weeks ahead of time, Mr Ong said. With the new plant, Hyflux's accumulated capacity is expected to hit 1.95 billion litres a day by 2011.

An excited Ms Lum told reporters and analysts that the new Algeria deal would take Hyflux 'into a different category' in the water-treatment field. She said it would be even more profitable than Hyflux's Singapore desalination plant, Singspring.

While the tariffs in Algeria would be roughly similar at 55.77 US cents, the cost of electricity, the main input cost, is half as much in Algeria. 'The plant is three times as large (as Singspring); at the same time, the borrowing rate is much less than what you can get in Singapore.'

Mercator buys vessel for US$65.5m

INDIA and China-focused dry bulk carrier Mercator Lines (Singapore) is steadily building up its fleet of geared vessels with the recent purchase of a 69,186 dwt Panamax class geared bulker for US$65.5 million from Panamanian owner Ken Line SA.

The YK Taurus is the second vessel to be acquired by Mercator since its listing last year. Mercator currently hires the vessel on a time charter-in basis which is due to expire at the end of this month. It is scheduled for delivery between June 1 and June 30 and is tentatively proposed to be financed by Mercator's IPO proceeds, internal accruals and debt.

With the latest acquisition, Mercator's number of owned dry bulk vessels increases to nine, which along with two chartered-in vessels makes up 11 in total with an aggregate capacity of 829,057 dwt. Significantly, the number of geared Panamaxes will also be increased to a total of five out of its nine Panamaxes, further strengthening its position as a leading operator of the Indian-operated geared Panamax market.

Elaborating on the acquisition, Mercator managing director and chief executive officer Shalabh Mittal said that it was a strategic move because the vessel's size and geared feature give it an advantage in its major trading markets.

'Its geared feature allows us to capitalise on the niche segment of dry bulk trade where port infrastructure and facilities are still underdeveloped. Such ports are present especially in the high growth Indian sub-continent that is currently experiencing high demand for dry bulk trades.

'Additionally, by taking advantage of the infrastructure shortcomings in the Indian sub-continent, we are also able to strengthen our end-to-end customised logistics solutions business in India , which we offer in conjunction with our parent company Mercator Lines Limited (India).
'The acquisition also serves to solidify our position as the largest fleet owner of geared Panamaxes amongst the Indian-owned shipping companies. This, combined with our deep understanding of market conditions and quick response to changing demands, greatly sharpens our competitive edge, giving us greater prominence in our niche areas - high growth markets such as India and China.'

Mercator shares closed 2.5 cents higher at 32.5 cents yesterday.

SPC Q1 net profit slips 12%

DESPITE recording 41 per cent higher sales of $2.7 billion, Singapore Petroleum Company saw its first-quarter net profit slip by 12.2 per cent to $98.4 million, a major factor being a tax write-back in the previous corresponding quarter.

Earnings per share for the quarter ended March 31, 2008, fell correspondingly by the same percentage to 19.08 cents.

Tax expense for the quarter was $22.4 million - against $5.8 million for the previous corresponding period - cue to two factors. Firstly, there was increased contribution to the bottom line from its exploration and production (E&P) activities, which accounted for $16.5 million of the tax expense.

Secondly, it was due to the deferred tax write-back of $10.5 million in Q1, 2007, as a result of the lowering of the Singapore corporate tax rate.

In Q1, SPC said it handled a total crude and product sales volume of 19.3 million barrels, which was a 5.8 per cent decline from Q1 2007. This was due to a reduction in fuel oil trading volumes as a result of a shortage of suitable blending components and also fewer cargoes coming from the Middle East.

Notwithstanding this, 'rising oil prices appear not to have dampened demand for refined products in Q1', it said. 'Despite the lower sales volume and a lower US$, the group's turnover of $2.7 billion was a 41 per cent increase over Q1 2007. Realisations (or profit per barrel) during the quarter averaged US$98.47 compared with US$61.13 for Q1, 2007, an increase of 61.1 per cent.'

SPC said it continued to optimise its refining capacity during the quarter - which saw it achieving an average margin of US$7 per barrel. This was comparable to the margin achieved for Q1, 2007, as well as the whole-year 2007 number.

Downstream activities contributed $2.62 billion in turnover and an operating profit of $81.8 million, while upstream E&P contributed $94 million in turnover and $38.2 million in operating profit for Q1.

SPC said that for Q2, its joint-venture Singapore Refining Company's processing capacity will be reduced by 3 per cent compared with first quarter due to scheduled maintenance shutdowns of its catalytic reformer unit and the Hydrocracker 2 unit in April and May. But SPC assured that it will have sufficient inventory during this period to cater to market demand.

On prospects ahead, it expects the continuing high oil and commodity prices to negatively impact global GDP growth. 'Against this expected slowdown of the global economy, demand for refined products may soften in the next few quarters. However, global refining capacity remains constrained and refining margins are expected to be well supported,' said SPC.

Lew Syn Pau retires from Ascendas post

LEW Syn Pau has retired from his post as director and non-executive chairman of Ascendas Funds Management (S) Ltd (AFM). AFM is the manager of Ascendas Real Estate Investment Trust (A-Reit).

In a statement released yesterday, AFM said Mr Lew's retirement is part of the board reorganisation process.

Taking over the chairmanship yesterday is AFM independent director David Wong Cheong Fook, whose position as AFM's audit committee chairman is now taken over by audit committee member Benedict Kwek. Mr Wong was group MD of Wearnes Technology until April 2003.

The board of directors of AFM said it wished to put on record its gratitude to Mr Lew for his 'sterling leadership, dedication, contribution and support over the last six years'.

Mr Wong added: 'Moving forward, the board, together with the AFM team, will continue to build on the strong performance of A-Reit to propel it to greater heights.'

AFM also announced the appointments of three new directors yesterday: Joseph Chen Seow Chan, Chia Kim Huat, and Tan Ser Ping.

Mr Tan, who is CEO of AFM, is appointed executive director. He has been with the Ascendas Group since 2001 and with AFM for more than four years.

Both Mr Chen and Mr Chia are non-executive directors and are appointed members of the AFM's audit committee.

Mr Chen was a managing director of global treasury at UOB before retiring in 2005 after 17 years with the bank.

Mr Chia is a partner with Rajah & Tann LLP.

CMT Q1 annualised DPU up 15%

CAPITAMALL Trust (CMT) has announced a distribution per unit (DPU) of 3.48 cents for the first quarter ended March 31.

This represents, on an annualised basis, a DPU of 14 cents - 15 per cent higher than for the previous corresponding period - and a distribution yield of 4.02 per cent based on the unit price of $3.48 on Monday.

Pua Seck Guan, CEO of CMT manager CapitaMall Trust Management Ltd, said: 'The top-line numbers achieved by CMT remains very strong, supported by robust rental renewals and multiple asset enhancement initiatives.'

While Mr Pua expects organic growth driven by asset enhancement programmes to continue to 'take centre stage in the coming quarters', he revealed that as at March 31, over 92 per cent of its forecast net property income for 2008 has already been locked in.

He added: 'With a gearing of 35.3 per cent, we have a capacity to acquire at least $1.2 billion worth of assets through 100 per cent debt funding, without resulting in a change in our corporate rating of A2 assigned by Moody's Investors Service. We will continue to actively pursue yield-accretive acquisition opportunities to grow our local target asset size to $8 billion by 2010.'

As at April 21, CMT had an asset size of about $5.9 billion.

CMT's gross revenue for the first quarter came to $121.1 million, an increase of $3.9 million or 3.4 per cent over its forecast.

Net property income of $84.7 million for the quarter exceeded forecast by 8.2 per cent or $6.4 million. CMT added that IMM and Bugis Junction outperformed forecasts by 11.5 per cent and 15 per cent respectively.

Rental renewal rates for the quarter registered growth of 10.4 per cent over preceding rental rates and 4.3 per cent over forecast rental rates.

For 2008, CMT said that a significant amount of asset enhancement initiatives will be in progress at various malls across its portfolio amounting to some $179.1 million in capital expenditure.

These include on-going works, such as the redevelopment project at Sembawang Shopping Centre, which commenced in Q107 and is expected to be completed by Q408, Lot One Shoppers' Mall, which commenced in Q307 and is expected to be completed in Q408, and upcoming works such as the redevelopment of Jurong Entertainment Centre, as well as enhancement schemes at Bugis Junction and Plaza Singapura.

CMT said that vacancy voids may have a varying impact on operational costs in the coming quarters in 2008. As such, CMT has retained $5.5 million of its taxable income available for distribution to unitholders for the quarter.

CMT said that the retained taxable income would provide a sustainable pool of funds that would help negate the impact of fluctuating operational cash flows, thereby providing unitholders with stable 2008 quarterly distributions.

At the end of trading yesterday, CMT unit price was up five cents to close at $3.53 per unit.

First Reit Q1 DPU increases 15.6% to 1.85 cents

HIGHER rents and contributions from new properties led healthcare-focused First Reit to a 15.8 per cent gain in first-quarter distributable income to $5.1 million.

The performance lifted distribution per unit 15.6 per cent to 1.85 cents, from 1.60 cents in Q1 last year. On an annualised basis, this translates to 7.5 cents or a distribution yield of 10.7 per cent, based on last Friday's closing price of 70 cents a share.

Ronnie Tan, CEO of the Reit's manager Bowsprit Capital Corp, said that the results reflect the structure of the Reit, which focuses on long-term stability.

'Our properties are leased to master lessees for relatively long tenures of 10 and 15 years, with provisions for favourable yearly rental increases,' he said. 'This minimises the risk associated with short-term leases and multiple tenants. . .

'In addition, the base rent for our Indonesian properties is pegged to a relatively stable Singapore dollar, which helps reduce forex volatility.'

First Reit has eight properties in its portfolio, including three Siloam Hospitals and the Imperial Aryaduta Hotel and Country Club in Indonesia. Between Q2 and Q3 last year, the trust acquired Adam Road Hospital, The Lentor Residence and two nursing homes in Singapore.

For the three months ended March, net property income rose 24 per cent to $7.4 million. Management fees rose 27.2 per cent to $701,000. The trust also incurred $490,000 in finance costs for external borrowings used to fund the Singapore acquisitions.

With a debt-to-property valuation ratio of 15.6 per cent, Dr Tan said that there is ample space to support further growth in assets. The Reit is aiming for a portfolio size of $400 million by the end of this year, from $326 million now. It is eyeing opportunities in China, Indonesia and Malaysia.

Amid expectations of a global economic downturn, Bowsprit Capital remains optimistic that First Reit will continue to perform 'because of its stable revenues which are based on long-term rental leases'.

Shares of First Reit went up half a cent yesterday to close at 70.5 cents.

Aztech's Q1 profit down 17.9% to $3.13m on rising oil prices

RISING oil prices, coupled with the sustained depreciation of the US dollar against the yuan and the Singapore dollar, continue to take their toll on Aztech Systems, dragging its first-quarter profit down by 17.9 per cent to $3.13 million.

Despite registering a 23.5 per cent increase in revenue to $68.97 million for the three months ended March 21, 2008, the company's bottomline was dented by rising production and labour costs. As a result, Aztech's Q1 earnings per share also dropped 18.3 per cent to 0.76 cents.

Aztech's turnover is derived mainly from sales of networking equipment such as Internet routers and ADSL (Asymmetric Digital Subscriber Line) modems, as well as gadgets like music players and cordless phones.

Earlier this year, the company branched into the business of supplying construction materials through its wholly owned subsidiary, AZ United.

According to Aztech chairman and CEO Michael Mun, the company's OEM (original equipment manufacturing) and ODM (original design manufacturing) business continues to be the revenue linchpin, accounting for 51 per cent of total Q1 sales.

In particular, turnover in this segment was helped by the major contract it signed with a North American telco in September last year. To date, 2.4 million ADSL modems have been delivered to this customer and new orders are still flowing in, Mr Mun said.

The firm's two other key business units - contract manufacturing and retail - accounted for 42 per cent and 7 per cent of turnover respectively. Aztech's newly-minted building materials subsidiary, however, is only expected to contribute positively to the company's income later this year as AZ United has just started delivering shipments under a flagship deal it secured in February this year. The three-year contract is worth some $250 million.

From a geographical standpoint, North and South America remain as the sales strongholds and the region contributed 45 per cent to Aztech's Q1 revenue, followed by Europe (34 per cent) and Asia-Pacific (10 per cent).

To offset rising oil and commodity prices, Mr Mun said Aztech will adjust the selling prices for its products and implement a series of energy efficiency programmes to rein in production costs.

Mounting wages and inflation in China will be tackled through increased factory automation, as well as the adoption of more flexible production systems and cell-based manufacturing lines. In addition, currency fluctuations will be managed through hedging, he explained.

'Our development plans remain on track, and we are encouraged by our success in the broadband market and our new diversification venture. At the same time, we acknowledge that the business environment in 2008 is challenging with the worldwide cost pressures,' Mr Mun said.

Aztech shares were up 0.5 cent to close at 23 cents yesterday.

Pacific Shipping Trust Q1 DPU falls

PACIFIC Shipping Trust has allocated an income distribution of US$3.3 million for Q1, despite posting an 83 per cent fall in net profit to US$466,000. The distribution per unit (DPU) for the three months ended March will be 0.97 US cents, down from 1.04 US cents a year ago. Gross revenue for the period went up 4 per cent to US$8.85 million.

UK asset manager invests in Chasen

UK offshore asset management firm Pacific Capital Investment Management has agreed to invest up to $30 million in Chasen Holdings through an issue of convertible notes. The notes, to be issued in tranches of $1 million, will be unsecured with a 0 per cent coupon rate and will mature in 2011.

China New Town Q1 profit up 9%

CHINA New Town Development Company saw its net profit attributable to equity-holders rise 9 per cent to 63.4 million yuan (S$12.3 million) in the first quarter ended March 31, 2008. Including minority interests, net profit rose 3 per cent to 101 million yuan. Group revenue rose 24 per cent to 383.1 million yuan. The group completed the sale of one residential plot in Shanghai and two residential plots in Shenyang in Q1 2008, and recognised revenue of 330 million yuan and 43.6 million yuan, respectively, from the sales.

SingXpress calls off acquisition

SINGXPRESS Ltd yesterday said it has called off the acquisition of Singapore Service Residence Pte Ltd, SingXpress International Pte Ltd and Anglo-French Travel Pte Ltd. The acquisition, which was to have included a shareholder's loan advance as well, was cancelled after considering the prolonged delay in completion and 'changes in the prevailing market conditions'.

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.