Wednesday, April 16, 2014

Keppel Corp Q1 net profit falls 5% to $339 million

Keppel Corporation said on Wednesday its net profit in the first quarter dropped 5% on the year to $339 million.

Keppel is the world's top offshore jackup drilling rig producer and has business in property development and infrastructure. The firm booked revenue of nearly $3 billion for the quarter, up 8.6 percent from a year earlier, it said in a statement.

The offshore and marine division secured $1.9 billion worth of new orders in the quarter, pushing the company's net order book to a record high of $14.4 billion.

Quek Leng Chan's Hong Leong unit subscribes to $194 mil of Ezion shares

Ezion Holdings, the Singapore liftboat developer and operator, announced that Asia Fountain Investment Company, an indirect wholly-owned subsidiary of Guoco Group and GuoLine Capital, an indirect wholly owned subsidiary of Hong Leong Company (Malaysia) Berhad, has subscribed to 100 million new shares of the company for US$155 million ($194 million).

Chew Thiam Keng, Group CEO of Ezion, says: “We are most happy to have the privilege of working with Tan Sri Quek Leng Chan, an esteemed and most well regarded global investor. On behalf of the Board and management of Ezion, I warmly welcome his investment. This investment will allow Ezion to leverage on our new shareholders’ extensive network of resources and vast experience, in particular in Asia, and to further expand our business in the vibrant offshore Oil and Gas industry. We also believe that the proceeds received from this investment will allow us to better position ourselves to meet the strong demand of clients for our product and services, balance our capital structure and allow us to keep up with the growth without having to raise further equity for at least the next 12 months based on current business prospects."

Credit Suisse acted as sole arranger for the proposed subscription.

Apr 16: Keppel Land, Qian Hu

Singapore stocks closed higher on Tuesday after a rally on Wall Street in response to upbeat US economic data. The benchmark ST Index added 31.49 points, or 0.98%, to finish at 3,246.32 on turnover of $1.77 billion.Here are some stocks that could move the market this Wednesday morning:

Keppel Land's net profit for the first quarter ended March 31 slipped 9.2% to $87.7 million, dragged down by lower contributions from associates and jointly controlled entities and the absence of a tax writeback.

Ornamental fish seller Qian Hu said net profit for its first quarter ended March 31, 2014 was up 86% at $115,000 from a year ago. Revenue was up 2.4% at $20.7 million due to continued recovery in dragon fish.

Keppel Telecommunications and Transportation posted a 2.9% increase in net profit to $15.4 million for the first quarter ended March 31, 2014, after the market closed on Tuesday. Revenue was $48.7 million, up 21.6% from the same period a year ago.

Cambridge Industrial Trust's 1Q DPU up 1.4% year-on-year

Cambridge Industrial Trust today announced a distribution per unit (DPU) of 1.251 cents for its first quarter ended 31 March 2014 (1Q2014), up 1.4% from 1.234 cents in the same period a year ago. On an annualised basis, DPU for FY2014 is 5.074 cents, an increase of 1.4% as compared to 5.005 cents a year ago. Net Property Income rose to $20.4 million from $19 million from a year ago.

“During the first quarter, we completed the acquisitions of 30 Teban Gardens Crescent and 11 Chang Charn Road for S$73.0 million. These two properties will start to contribute from 2Q2014 onwards. On the leasing front, we have proactively managed the 2014 lease expiries to spread the WALE beyond 2017. With a gearing ratio of 29.9%, we are well-positioned to pursue growth opportunities both within and outside our portfolio,” said Philip Levinson, Chief Executive Officer of CIT’s manager.

As at 31 March 2014, CIT has 48 properties located in Singapore, with 7.8 million sq ft of gross floor area (GFA), leased to a diversified base of 146 tenants. The portfolio occupancy remains high at 97.0%, with a Weighted Average Lease Expiry (WALE) of 3.6 years (by income) and average security deposits of 11.3 months.

Tuesday, April 15, 2014

Motor racing-Singapore Airlines spreads wings into F1

Singapore Airlines (SIA) has been unveiled as the new title sponsor of the city-state’s Formula One race in September as the carrier bids to promote its brand to motor racing’s global television audience.

The Sept. 19-21 race will see the carrier’s brand prominently displayed around the Marina Bay Street Circuit, although financial terms of the deal announced in a statement on Tuesday were not disclosed.

“We are thrilled to be taking up the title sponsorship of one of the most exciting races on the F1 calendar, and we are especially pleased to be doing so in the lead-up to Singapore’s 50th birthday next year,” Singapore Airlines CEO Goh Choon Phong said.

“Singapore Airlines has always supported the development of both sports and tourism. Through our involvement with the world’s first F1 night race we will be able to enhance both for the benefit of Singaporeans and visitors alike,” he added.

Formula One supremo Bernie Ecclestone welcomed the carrier’s association with the “extremely popular” race, saying it “demonstrates Singapore’s forward thinking, an attribute Singapore Airlines has always achieved”.

The airline’s sponsorship - succeeding local telecoms company Singapore Telecommunications Ltd - comes as premium carriers such as SIA seek ways to boost their brand while customers increasingly opt for budget airlines.

SIA faces stiff competition on its medium and long-haul routes from both Gulf carriers and Asian regional airlines.

’PERFECT MOVE’

Last year, Emirates Airline, Dubai’s flag carrier, clinched a five-year sponsorship deal with the Formula One racing organisation as it bids to outdo regional rivals.

Sponsorship consultant Ben Heyhoe Flint called it a perfect move for Singapore’s premium carrier.

“For me, Singapore Airlines is a very traditional brand, they have done nothing of this stature before. They’ve done the horse-racing festival in Singapore but this is leagues ahead of that,” Flint, chief executive of the Asia Sponsorship News, told Reuters by telephone.

“It would reinforce its status as a premium carrier because the brand value of Formula One is premium. For me, Singapore Airlines really needed something like this.”

The carrier would have to find innovative and create ways to leverage maximum mileage out of the sponsorship deal, he said.

“What’s more interesting about it is how they are going to activate, how they are going to use it.

“Motorsports it not a big thing here but SingTel made the effort and I hope Singapore Airlines continue to do that for the grand prix,” Flint added.

The Singapore Grand Prix was first held at the Marina Bay Street Circuit in 2008 and has been won for the last three years by Red Bull’s quadruple world champion Sebastian Vettel.

Ascott Marunouchi Tokyo to open in 2017, ahead of Olympics

The Ascott Limited, CapitaLand’s wholly-owned serviced residence business unit, as brought its premier Ascott The Residence brand to Tokyo through a master lease agreement with Mitsubishi Estate Company (MEC), one of Japan’s largest real estate developers. The 129-unit Ascott Marunouchi Tokyo is slated to open in 2017, ahead of the 2020 Olympics to be held in the city.

Located in the Marunouchi-Otemachi area, Ascott Marunouchi Tokyo will be part of MEC’s mixed-use development comprising offices and retail outlets. The serviced residence has a prime address in Tokyo’s central business district where multinational companies and the headquarters of major Japanese banks are based.

Besides being near prominent commercial buildings, Ascott Marunouchi Tokyo is close to renowned tourist attractions like Ginza which is the city’s most prestigious shopping, dining and entertainment district. The serviced residence is located near the Imperial Palace, with apartments offering some of the best views of the Kokyo Gaien National Garden. Guests will also enjoy convenient access to other parts of Tokyo and Japan as Ascott Marunouchi Tokyo is linked to the Otemachi subway station and is a 10-minute walk to the main Tokyo train station.

Ascott Marunouchi Tokyo will provide spacious and elegantly-designed apartments ranging from studios to three-bedroom units with separate working and sleeping areas. For a local touch, guests can choose apartments that come with tatami mattresses. Facilities at the serviced residence include a swimming pool, roof-top terrace, gymnasium, reading lounge, business centre and meeting rooms.

Ascott currently operates about 360 serviced apartment units in Citadines Shinjuku and Somerset Azabu East in Tokyo, and Citadines Karasuma-Gojo in Kyoto. In addition to serviced residences, Ascott has 40 properties with more than 2,800 apartment units for corporate lease across 10 major cities including Tokyo, Osaka, Nagoya and Fukuoka.

CapitaMalls shares jump on $3.06 bil offer: Update

CapitaMalls Asia, Singapore’s largest mall operator, had the biggest gain since going public in 2009 after CapitaLand offered to buy the rest of its mall unit to consolidate some businesses and boost returns.

CapitaMalls Asia surged as much as 22% to $2.21, the largest advance since November 2009, and traded at $2.19 as of 1:42 p.m. local time. CapitaLand, Southeast Asia’s biggest developer, jumped 5.8% to $3.09. The developer bid about $3.06 billion, or $2.22 a share for CapitaMalls Asia, a 23% premium to the last closing price on April 11. Trading resumed today after shares of both companies were halted before the announcement.

“CapitaLand’s offer to take CapitaMalls private is a win-win for both CMA and CapitaLand,” said Tricia Song, Singapore- based analyst at Barclays Plc. “Regaining full control of CapitaMalls should allow CapitaLand more flexibility, including the ability to streamline its organizational structure.”

CapitaLand, which owns 65.3% of CapitaMalls Asia -- whose Singapore malls include ION Orchard and Plaza Singapura along the city’s famed Orchard Road shopping strip -- sold shares in the unit in 2009, raising $2.8 billion. The latest deal will help CapitaLand’s increased emphasis on mixed-use developments, those that include residential, commercial and retail projects, according to Standard Chartered Plc.

DIFFERENT MARKET

Taking the unit private would raise the earnings per share of CapitaLand Group by about 22% for the year ended Dec. 31, and improve the return on equity of the group to 6.7% from 5.4% for the same period, the developer said yesterday in a statement.

“The market has changed,” CapitaLand President Lim Ming Yan said at a press conference in Singapore yesterday. “Earlier companies were pure play residential, now companies are emerging that are doing mixed developments, which include homes, offices and malls. This move will help us compete better.”

Such projects include Project Jewel, a new development at Singapore’s Changi airport where a parking lot is being turned into a shopping mall and hotel, and the Atrium@Orchard, which has retail and office space along Orchard Road.

EARNING GROWTH

CapitaMalls Asia owned 105 shopping malls valued at $34.3 billion as of Dec. 31, the company said in a presentation in March. The mall owner reported a 17% increase in fourth- quarter profit to $216.4 million from a year earlier. CapitaMalls Asia holds $1 billion in cash with a net gearing of 22%, according to a Feb. 14 report from OCBC Investment Research.

Singapore malls contributed 55% to its profit for the year ended Dec. 31 at $405 million, followed by China, where its malls helped add $262 million, or 35% of the company’s profit, CapitaMalls said. Malls in Singapore and China accounted for 86% of the company’s assets.

CapitaLand in February said fourth-quarter profit fell 46% after it recorded a loss on the sale of a stake in Australand Property Group and lower revenue from its Singapore home sales. Net income declined to $142.9 million in the three months ended Dec. 31, from $262.7 million a year earlier.

The transaction shows that CapitaLand couldn’t put the money to better use at a time when property markets in Singapore and China are starting to show some weakening, according to Samsung Asset Management Co.

‘FINANCIAL ENGINEERING’

Singapore’s home sales dropped to the lowest this year in March as loan curbs crimped demand from homebuyers, a government report showed today. Chinese developers will probably face more challenges this year because of an oversupply of housing in smaller cities, according to a Bloomberg News survey.

“The company is effectively undertaking financial engineering to enhance returns,” Alan Richardson, an investment manager at Samsung Asset in Hong Kong, said in an e-mail. “The problem is these returns are still unsatisfactory relative to the cost of equity and suggests a lack of investment opportunities in an adverse environment of declining property prices in Singapore and slowing growth opportunities in China.”

CapitaLand’s offer works out to be about 1.2 times CapitaMalls Asia’s book value, which is cheaper than the 1.5 times book value when it listed in 2009, according to brokerage UOB Kay Hian.

The offer is being managed by Credit Suisse Group AG and Morgan Stanley, according to the statement.