Daily news - 30 Apr

Kepland clears air over cash call
Keppel Land said yesterday that it did not enter into any negotiations at the beginning of the year, nor was it in any specific early discussions with banks, over a rights issue. The company had said that there was no need for a rights issue in January during its results briefing. But last week, Keppel Land announced that it was raising $712 million through a rights issue. Responding to a BT commentary yesterday which highlighted this, Keppel Land said that any suggestions that the company was in early discussions with bankers about a potential rights issues at the beginning of the year, and that such negotiations suggested that a rights issue was an option, 'are erroneous'. 'In the normal course of business, Keppel Land meets with investment banks which would present various funding proposals as part of their business development efforts. Keppel Land had also disclosed that a rights issue was not necessary at its results announcement briefing on 21 January 2009 in response to a question. Had Keppel Land decided to pursue any specific proposal, it would have made an announcement in accordance with SGX-ST Listing Rules,' it said. 'The company is undertaking the rights issue from a position of strength,' Keppel Land added.

Yangzijiang Q1 profit rises 30% to 483m yuan
Yangzijiang turned in a 30 per cent rise in first-quarter net profit to 483.3 million yuan (S$106.3 million) on a 23 per cent rise in revenue to 2.09 billion yuan, despite the tough times in the shipbuilding industry. Yangzijiang kept its gross profit margin above 20 per cent, despite taking an 8 per cent provision, compared with a provision of just 0.5 per cent in the previous corresponding quarter. The higher provision was taken to cover potential variations to contract prices for vessels under construction, higher raw material costs and a weakening US dollar/yuan rate. The increased provision was offset by the higher profit margins from construction of larger vessels at the group's new yard, Yangzijiang said. Operating costs were kept under control, though the cost of sales rose to 1.67 billion yuan from 1.34 billion yuan previously due to an increase in turnover and construction activity. The effective tax rate fell from 7.2 per cent in Q1 2008 to 5.7 per cent in Q1 2009, as more contributions came from the new yard, which is tax-exempt.

Source: Kim Eng