Wednesday, October 22, 2008

Daily news - 22 Oct

SPC Q3 earnings dive 99.5% even as turnover soars
Singapore Petroleum Company (SPC) has been hit by the double whammy of volatile oil prices and the global financial crisis. Despite a 46 per cent higher third quarter turnover of $3.3 billion, SPC saw its Q3 net profit plunge to $507,000, or by 99.5 per cent, from $98.12 million in Q3 last year. Earnings per share was 0.12 cent, also sharply down from 19.03 cents in Q3 last year. SPC said that high oil prices at the beginning of the June-Sept quarter (oil hit a peak of US$147-plus in July) adversely affected demand. 'As the quarter progressed, the global financial crisis and the post-Beijing Olympics slowdown resulted in demand for refined products being curtailed further.'The financial crisis led to an unwinding of positions which exacerbated the fall in oil prices. By the end of the quarter, oil prices had declined as much as 40 per cent from its record highs in July,' the company added. With the slowdown in product demand, SPC saw its average Q3 refining margin drop to US$4 a barrel, compared to US$5 in the same quarter last year. This was also considerably down from US$13 in Q2 and US$7 in Q1 this year. The steep decline in crude and product prices required SPC to mark down its inventory to month-end September prices, with this resulting in a write-down of $125.3 million for the quarter.

CMT puts works at three malls on hold
CapitaMall Trust (CMT) yesterday said that it will put upgrading plans for some of its properties on hold because of high construction costs. Singapore's biggest property trust also said that its third-quarter distributable income rose 14.2 per cent to $60.8 million, from $53.2 million a year earlier, as contributions kicked in from new acquisition The Atrium. Q3 distribution per unit (DPU) rose to 3.64 cents a share, from 3.4 cents a year earlier. Net property income rose 13.1 per cent to $86.9 million, from $76.8 million in Q3 2007. The earnings were in line with expectations, analysts said. The news pushed CMT shares to their highest level in more than two weeks. The stock rose as much as 16 cents or 7.8 per cent to $2.21 before ending the day at $2.11. Looking ahead, CMT will be cautious, will review new commitments carefully and will not sacrifice liquidity for new projects, said Lim Beng Chee, chief executive-designate of the trust's manager. For now, enhancement programmes that have not started at three malls - Funan DigitaLife Mall, Tampines Mall and Jurong Entertainment Centre (JEC) - have been put off. Works at JEC were projected to cost about $170 million.

MapletreeLog slashes leverage ratio to 36.9%
Mapletree Logistics Trust (MapletreeLog) cut its leverage ratio to 36.9 per cent in the third quarter of this year - down significantly from 56.3 per cent in Q2. At Sept 30, its debt was down about 30 per cent - from $1.461 billion in the previous quarter - to $1.023 billion, with the help of a rights issue in July. However, this had a dilution effect on its distribution per unit (DPU). For Q3, MapletreeLog reported DPU of 1.84 cents, down 9.8 per cent quarter on quarter but up 7 per cent year on year. Distributable income of $25.4 million was 33.1 per cent higher than a year earlier, while net property income was up 18.7 per cent to $40.2 million. At the close of the rights issue offer period, only 59.9 per cent of valid acceptances were received. MapletreeLog's sponsor Mapletree Investments took up the balance of the units and applied for excess rights, lifting the final demand tally to 130.7 per cent.

Ezra full-year profits double to US$175m
Ezra Holdings more than doubled full-year FY08 profits to US$175.4 million from US$68.2 million previously. Revenue rose by 87 per cent to US$268.3 million on strength in the offshore chartering and fabrication engineering markets. Turnover was helped by full-year contributions from nine vessels, including two 18,000-bhp anchor handling, towing and supply vessels (AHTS) and higher renewal rates. Together with the maiden contributions from another two anchor handling tugs and three AHTS for two to eight months of operations, profit from Ezra's offshore support services division, including contributions from associate and joint venture companies, jumped 62 per cent to US$74.5 million. 'What you see today is the result of the careful execution of our strategy to grow a diversified fleet to expand our capabilities. Our recurrent earnings are also expected to improve as we take delivery of our larger vessels in the next three years,' said managing director Lionel Lee. 'Demand in the offshore support services market is still firm and presents good opportunities for owners with available tonnage.'

KTT Q3 profit falls 5.1% to $12.7m
Keppel Telecommunications and Transportation (KTT), which has lost 80 per cent of its value in less than one month, yesterday posted Q3 net profit of $12.7 million, down 5.1 per cent. Earnings per share fell 8.7 per cent to 2.1 cents. Net profit for the three months ended Sept 30, 2008 fell due mainly to lower contributions from associate MobileOne (M1). KTT owns 20 per cent of M1. Share of results of associates fell 11.4 per cent to $14.3 million, KTT said. M1 last Friday reported a 21.1 per cent drop in third-quarter net profit and warned of a drop in full-year earnings. Net income slid to $34.4 million from $43.6 million last year, as higher customer acquisition and retention costs dented profitability, M1 said. KTT also said it was on the lookout for opportunities amid the financial downturn.

SembMarine unit wins $35m contract
SembCorp Marine unit Sembawang Shipyard achieved a breakthrough contract in the LNG carrier market with an initial contract to extend the life of the first of a fleet of six vessels for International Gas Transportation Company (IGTC). Work will start in June and is valued at an estimated $35 million. IGTC is the parent shipping company of the North West Shelf LNG Venture and is equally owned by BP, BHP Billiton, Chevron, MIMI (a joint Mitsubishi and Mitsui company), Shell and Woodside companies. The Northwest Sanderling is the first of six vessels in their fleet of Moss Rosenberg design LNG carriers to reach its 20th year in service. This is the first time that a major LNG operator has committed itself to a long-term longevity programme to extend its vessels' future trading life when the vessels progressively reach their 20th year in service. The contract is the first such contract of IGTC's Longevity Project, which involves the life extension of six LNG carriers over six years. The life extension works include ballast tanks blasting and coating work, hull structural enhancement, integrated automation system renewal, HVAC and refrigeration system renewal, cargo and ballast valve actuator system replacement and boiler system renewal. However, the contract is not expected to have any material impact on the net tangible assets and earnings per share of Sembcorp Marine for the year ending Dec 31, 2008. Sembcorp Marine shares closed four cents higher at $1.52 yesterday.

Source: Kim Eng

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