Wednesday, December 24, 2008

Daily news - 23 Dec

DBS warns of lower Q4 net earnings
DBS Group Holdings' net profit is expected to slide further in the fourth quarter, the bank warned yesterday as it announced plans to raise some $4 billion in new capital from a rights issue. 'Our fourth-quarter net profit could end up moderately lower than in the third quarter, prior to one-time charges,' said DBS chief financial officer Chng Sok Hui. That would make it the group's worst quarter since at least the end of 2005, when it reported a profit of $384 million, excluding goodwill charges and one-time gains. As for dividend payment, DBS said it 'intends to declare and pay a final dividend for the quarter ending Dec 31, amounting to the same absolute cash amount as it would have done had there been no rights issue'. In future, 'DBS' dividend policy will reflect its long-term sustainable earnings growth and capital requirements, as well as general prevailing financial and business conditions', it said. Including one-time charges, the Q4 results could be much worse. DBS is expected to take a charge of $45 million to pay compensation to the 900 staff it fired last month. It also expects a further impairment of its investment in Thailand's TMB Bank.

Parkway to manage US$200m M-E hospital
Parkway Holdings – Following multiple forays in Asia, Parkway Holdings is setting its sights on the Middle East next with a contract to manage a new US$200 million hospital in the United Arab Emirates. The project marks Parkway's first overseas management consultancy job, in which it will not have an equity stake in the hospital asset. Parkway group president and CEO Lim Cheok Peng said it provides a new source of revenue amid a challenging economic climate. His group recently announced hefty wage cuts for senior management and shed nearly 150 jobs. On whether the new project will be significant to Parkway's earnings, Dr Lim said: 'It all depends on how big this business is going to be in the coming years. But obviously the opportunity is there for us now to look at in the light of the present crisis as well, because, number one, there is no capex (capital expenditure) involved. It's all human resources and intellectual property, which Parkway owns a lot at this point of time.' Called Danat Al Emarat Women & Children's Hospital, the new hospital is a 21-storey facility located in Abu Dhabi. It is owned by United Eastern Medical Services LLC (UEM), a private healthcare investing and development firm. When completed by early 2012, Danat Al Emarat (Arabic for Pearl of the Emirates) will have 170 beds offering luxury hotel-like comfort, with potential to increase to 300 beds. At a gross floor area of 80,000 sq m, Danat Al Emarat will be the flagship project of UEM, which is also building primary care clinics, a stem cell storage bank, and a medical spa and wellness centre. UEM is backed by three major conglomerates in the Gulf. UEM managing director and CEO Mohammed Ali Al Shorafa said Parkway was chosen from a shortlist of eight to 10 international names. The Singapore healthcare player was picked because of its expertise in dealing with international patients, which Danat Al Emarat will be looking to attract. There are also plans for patient referrals from Danat Al Emarat to Parkway's doctors in Singapore. 'A lot of them will be the cases that require much more attention or require much more expertise that won't be available in Abu Dhabi,' he said.

Source: Kim Eng

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