SembCorp Industries’ 3Q11 Earnings Fall 9% To $222.4m
SembCorp Industries’ 3Q11 bottomline fell 9% to $222.4m despite a 22.2% jump in revenue to $2.6b. Excluding a one-off gain recorded in 3Q10, net profit for the quarter would have jumped 5% to $222.4m. Gross profit, on the other hand, dropped by 13% in 3Q11 and 6% in 9M11 mainly due to lower contribution from Marine. Utilities business remains the main revenue contributor. Notably, the segment’s 3Q11 net profit grew 33% to $78.8m, with all regions registering growth, particularly Singapore. Analysts expect continued strength at SembCorp Industries’ Singapore utilities business. “With the strong demand and lack of new power generating capacity, power spread in Singapore is expected to remain strong until 1H13,” remarked DMG analyst Jason Saw.
Significance: Despite the on-going macroeconomic uncertainty, SembCorp Industries’ business is expected to stay positive as the demand for utilities, power, and water business are generally very strong because they are essential services.
Yanlord Buys 50%-Stake In Shanghai Renpin For Rmb1.7b
Yanlord Land Group has acquired a 50% equity stake in Shanghai Youyou Group’s wholly owned subsidiary Shanghai Renpin for Rmb1.7b ($330m). With this acquisition, Yanlord will gain a 50% ownership of Shanghai Renpin’s 148,363.36 sqm gross floor area prime residential development site in Century Park International Community District. The site has a plot ratio of approximately 2.66 times which translates into an acquisition cost of approximately Rmb22,177 per sqm. Under the terms of the share transfer agreement, Yanlord will complete the payments for the acquisition by end Jul-12.
Significance: The aforesaid acquisition marks Yanlord Land’s foray into one of Shanghai’s most prestigious international community districts. Ideally situated in a prime location and attractively priced, this site will undoubtedly further expand its prime land bank holdings and is expected to contribute significantly to its future growth.
BreadTalk Invests $18m In PRE 8
BreadTalk’s wholly owned subsidiary, Imagine Properties, said it will subscribe for $18m in principal amount of junior bonds to be issued by PRE 8 or its holding company. PRE 8, which recently inked a deal to buy Suntec REIT’s Chijmes property for $177m, is a special-purpose vehicle set up to hold Chijmes, an iconic heritage landmark along Victoria Street. According to BreakTalk, the bonds come attached with 72 preference shares issued at $0.10 each. In addition, the junior bonds and preference shares are expected to be issued in Jan-12 and no later than 29 Feb-12.
Significance: This investment allows BreadTalk to expand its business as well as add value to shareholders through property value appreciation given that Chijmes is expected to be transformed into a vibrant food and beverage, and entertainment alternative for locals and tourists in the heart of downtown Singapore.