TCT Reports Steady NPI Growth During FY11
Treasury China Trust (TCT) has announced FY11 earnings of $235.5 million underpinned by net property income of $58.1 million. The bulk of the trust’s earnings came from a gain in fair value of investment properties which amounted to $312.5 million. The trust which was established to acquire, develop and manage real estate in China, mentioned that its FY11 financial report card showed a strong operating performance as revenues increased sequentially quarter-on-quarter. Across its office property portfolio, TCT attained a committed occupancy of 97.9 percent after beginning the year at 87.8 percent. Importantly, TCT remarked that the increase in occupancy, included in the 123 leases negotiated throughout FY11, was a major factor in TCT in achieving gross rental income of $92.7 million. During the year, TCT expanded its balance sheet through the acquisition of a 55 percent interest in Central Avenue Mall In Qingdao and a 100 percent interest in Huai Hai Mall Shanghai.
Significance: TCT continues to feel that a “hard landing” of the Chinese economy is not on the cards. China’s 2011 GDP growth of 9.2 percent as well as a 17.1 percent growth in retail sales continued to buoy TCT’s mood about its prospects.
Berlian Laju Defaults
Following earlier debt restructuring and debt standstill announcements in January-2012, Berlian Laju, Indonesia’s largest oil and gas shipping group, defaulted on six of its debt instruments. The shipper is the latest to cave in amidst a weak global market. Berlian Laju said on 27 February 2012 that it had defaulted on an approximately $57.8 million worth of scheduled payments. The shipper said that it is working with its financial advisor and will provide an update with respect to its restructuring of its indebtedness in due course. In February-2012, business trust, First Ship Lease Trust, said that some subsidiaries of Berlian Laju had defaulted on their payment obligations to three Singapore-flagged tankers. In total, Berlian Laju’s outstanding debt stands at US$1.9 billion, with about US$418 million in scheduled payments being due in FY12.
Significance: The oil tanker freight markets are struggling with a slump brought about by the economic downturn, coupled with high fuel costs and weak freight rates. Observers note that Berlian Laju’s problems are compounded by high debts following the expansion of its chemical tanker business.
Golden Agri Boasts 69.8% Increase In Revenue
Golden Agri-Resources, a palm plantation company, concluded FY11 with topline soaring 69.8 percent to hit nearly US$6 billion. Golden Agri credited the recovery in palm products output combined with robust crude palm oil (CPO) prices to its strong topline performance. Core net profit also grew, as it recorded a 47.5 percent increase to attain US$571m. However, a 33.6 percent decline in fair value gains pared revenue gains as earnings slipped 10.9 percent. During FY11, Golden Agri continued to leverage on its financial position to expand its business as evidenced by the 17 percent growth in total assets to US$11.8 billion. As of 31 December 2012, the firm’s financial position continues to be supported by strong cash flows as well as low gearing of 0.09 times. Golden Agri has proposed a record final dividend of $0.0184 per share.
Significance: Golden Agri has set aside US$500 million in plans to grow its business both upstream and downstream. It opines that the palm oil industry is supported by solid industry demand and supply fundamentals.