Singapore’s June Exports Beats Estimates
International Enterprise Singapore, a government agency which focuses on driving Singapore’s external economy, announced on 17 July that the nation’s non-oil domestic exports (NODX) for June 2012 expanded by 6.8 percent year-on-year, following the 3.2 percent increase last month, due to both electronic and non-electronic NODX. The latter was fuelled by a surge in the highly volatile pharmaceutical drugs sector. The figures beat the median estimate of 11 economists in a Dow Jones Newswires poll of a 2.1 percent year-on-year increase. Meanwhile, on a global basis, the top three NODX contributors in June were Hong Kong (up 41 percent), the European Union (up 17 percent) and Indonesia (up 20 percent). Oil domestic exports, on the other hand, contracted by 2.8 percent in June, compared to the preceding month’s 22 percent increase. The decline occurred mainly due to lower sales to Hong Kong, India and Liberia.
Significance: In view of the uncertain climate in the global economy, headwinds arising from the Euro crisis and the slowing growth in US and China would easily influence Singapore’s economy.
M1 Posts 17.7% Fall In 2Q12 Net Profit
For the second quarter ended 30 June 2012, M1 turned in a 17.7 percent fall in net profit, from $42.8 million to $35.2 million on the back of a 5.3 percent fall in operating revenue from $245.4 million to $232.3 million. The lower revenue was largely attributable to the lower handset sales. For the six-month period, net profit fell 11.5 percent to $75.5 million, while revenue dipped 1.6 percent to $494.7 million. M1 highlighted that the strong interest in new high-end smartphones will contribute to revenue growth over the two-year period as during the quarter the Android handsets made up the bulk of handsets sold, which costs the telco a lower subsidy per average handset compared to that of an iPhone. Notably, M1 also maintained its interim dividend from last year’s at 6.6 cents per share and hopes to maintain this absolute payout.
Significance: M1 revealed that the launch of nationwide LTE services is scheduled towards the end of the third quarter, where tiered smartphone plans will be announced at the same time. However, it expects margin improvements for the LTE services only one-and-a-half to two years down the road.
K-REIT Asia’s 1H12 Distributable Income Grows 94.6%
K-REIT Asia’s distributable income for the second quarter this year rose almost 90 percent year on year to $49.8 million, on the back of 118.6 percent jump in net property income (NPI) and stronger contributions from Marina Bay Financial Centre Phase 1 and One Raffles Quay. The strong NPI growth was due mainly to the acquisition of Ocean Financial Centre back in December 2011 as well as higher takings from assets such as Prudential Tower, 275 George Street and 77 King Street. For the cumulative period, K-REIT Asia’s NPI was up 104.4 percent to $59.8 million from $29.2 million last year while distributable income rose 94.6 percent to $98.4 million. Consequently, its distribution per unit for the half year rose 92 percent to $0.0384, which translates into an annualised distribution yield of 7.3 percent as at closing price of 29 June 2012. Going forward, K-REIT Asia will pay its distribution income every quarter commencing from the financial period ending 30 September.
Significance: With a healthy portfolio occupancy rate of 97 percent as at 30 June, K-REIT Asia remains confident of its ability to attract new tenants to its properties despite the rising supply of new office space in Singapore’s core central business district.
