Centurion To Enlarge Dormitory Footprint In Malaysia
Centurion Corporation, an owner and operator of dormitory assets, announced on 13 April 2012 that its Malaysian subsidiary would be acquiring a 100 percent stake in Gallery Connection. Gallery owns a dormitory asset which sits on a 15,560 square metre plot of land in Johor Bahru. The dormitory is currently undergoing renovation and refurbishment and is expected to yield 1,500 beds once works have been completed. The dormitory is situated near an established industrial cluster at Desa Cemerlang Industrial Park. This would ensure that the dormitory would be able to enjoy healthy demand from companies operating in the area. Total consideration for the acquisition would amount to RM150,010 with an additional Rm2.32 million in advances made by Centurion to Gallery. Kong Chee Min, Centurion’s chief executive, remarked that Centurion has been keeping up its momentum of overseas expansion since its last two acquisitions in November 2011 and February 2012. Kong said further that Centurion intends to further expand its presence in the Malaysia market through similar acquisitions.
Significance: The acquisition brings Centurion’s Malaysian dormitory portfolio to around 10,400 beds. In total, it has six operational dormitories in both Singapore and Malaysia as it strives to push its dormitory operations in becoming its chief revenue contributor.
Ezra’s 1H12 Revenue Leaps More Than 2-Fold
Ezra Holdings reported a stellar 1H12 report card as it reaped in contributions from its investment in Aker Marine Contractors. Revenue for the six month period jumped 124 percent on the back of gains in its subsea services division by around US$166.5 million, mostly in the form of sales contribution from EMAS AMC. The firm’s offshore support services division also managed to add more boosters to its topline due to several months of operations of its five platform supply vessels and three anchor handling tug and supply vessels. Other operating income also grew as Ezra recognised a one off gain on disposal of AFS investments amounting to US$34.8 million as well as a turnaround in its foreign exchange differences as it recorded a gain of US$8.1 million. Overall, earnings for 1H12 jumped 66 percent against the backdrop of a surge in revenue.
Significance: Deepwater development and production is expected to drive demand in Ezra’s industry for the next few years and with its commitment in maintaining a young and technologically advanced fleet of vessels, Ezra looks to be well-placed to benefit from these developments.
OCBC Shaves Lian Beng’s Target Price On Earnings
Lian Beng’s disappointing financial performance for 3Q12 did not sit very well with analysts at OCBC as they cut their share price target from a previous $0.51 to $0.47. Lian Beng had on 11 April 2012, reported a 26 percent drop in quarterly earnings to $10.4 million as well as a 29 percent drop in revenue to $95.9 million. OCBC said that even though Lian Beng’s construction segment remained its chief revenue contributor, execution of construction projects fell, causing the declines in revenue. OCBC had not anticipated this decline and thus readjusted its FY12 estimates to take this into consideration. OCBC consequently lowered estimates of Lian Beng’s FY12 revenue and earnings by 16 percent and 10 percent respectively. Despite the lowering of Lian Beng’s target price, OCBC still kept the counter as a “Buy” owing to optimism on the outlook of the construction industry.
Significance: Separately, Lian Beng’s planned listing of its engineering and concrete business on the Taiwan Stock Exchange could drive Lian Beng’s valuation and increase shareholders’ value.