Thursday, October 16, 2008

Daily news - 16 Oct

Downturn hits SIA passenger numbers in Sept
Singapore Airlines – Said that passenger numbers in raw terms dipped 1.6% to 1.51m in September from a year ago. However, there was a 1.3% growth in systemwide passenger carriage (measured in revenue passenger kilometres), largely due to good loads on its 'kangaroo route' - London-Singapore-Sydney. But with capacity (measured in available seat kilometres) up by 6.8% during the month, the passenger load factor declined 4.1 percentage points to 76.9% in September. Meanwhile, a 7.3% drop in cargo traffic, against a 4.2% reduction in capacity, translated to a 2.1 percentage points decline in cargo load factor to 61.1%. As a result, overall load factor fell to 67.4% - one of the lowest levels in recent years. But it's the passenger side which is of concern, say analysts. All route regions recorded declines in passenger load factor as new capacity introductions were not matched by a commensurate increase in passenger traffic. The airline attributed this to softening demand caused by weakening global economic conditions.

Thakral chairman Singh remains as director
Thakral Corporation – Thakral boss Kartar Singh Thakral has hung on to his seat on the company's board. Shareholders voted at an extraordinary general (EGM) meeting yesterday to keep him as a director. But while the fate of Thakral's chairman and founder is now clear, the same cannot be said of the investment by Hong Leong Asia (HLA) in the consumer electronics distributor. Some 54.64% of shares were cast against HLA's motion to remove Mr Singh as a director. HLA had said that the 74-year-old chairman was no longer able to lead or contribute effectively. But his supporters disagreed yesterday. Some cited other examples of older corporate and political leaders. But there were also shareholders on the other side of the fence. Some were worried that HLA would sell out of Thakral. A representative of HLA's indirect subsidiary Venture Delta said if it doesn’t receive shareholders' mandate at the EGM, it will consider all options including divesting its stake. Venture Delta's representative also questioned Mr Singh's involvement in Thakral's business. Discussions revealed that he had not visited operations for the past two-and-a-half years, saying that was because 'Hong Leong is in charge.'

Cosco S'pore responds to SGX queries on price fall
Cosco Corp Singapore – Finally broke its silence yesterday on several issues which had driven down its share price, after it was prompted by several queries from the Singapore Exchange (SGX) to issue a statement. News of Cosco's Norwegian client MPF Corp filing for bankruptcy recently had spooked the market, and fanned worries that the credit crisis could squeeze demand for new shipbuilding and lead to order cancellations. Cosco shares lost around 37% over two days to close at 79.5 cents yesterday. In its statement after the close of trading, Cosco said that it was brought to its attention that MPF, the buyer of a floating, production, drilling, storage and off-loading (FPDSO) unit being built by subsidiary Cosco Dalian, had sought bankruptcy protection. However, it has not received any official notification of the bankruptcy protection sought by MPF. The value of the MPF contract is about US$119m. MPF has made payments for the first three instalments amounting to US$98m. The fourth (and final) payment of some US$21m is due to be paid upon delivery of the vessel, scheduled for Dec 15.

Source: Kim Eng

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