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Stocks In Focus SG (Keppel Corp, LippoMalls, Yoma Strategic Hldgs) – 07/11/13
Keppel Secures US$1.1b Rig Building Contract
Keppel Corporation via its subsidiary, Keppel FELS, has secured a repeat order from a subsidiary of Transocean to build five KFELS Super B Class jackup rigs for US$1.1 billion with an option for five more. The rigs are slated for progressive delivery from 1Q16 to 3Q17. These rigs are equipped with a two million pound drilling system combined with a cantilever load of 3,700 kips that is capable of drilling to 35,000 feet, at a 400 feet water depth and 75 feet of outreach, which allows coverage of a larger well pattern. In addition, these rigs are also equipped with features which allow drilling and the preparation of drill pipes to occur simultaneously. Keppel FELS and Transocean have a long and sustained relationship from several projects such as the recent delivery of three jackup rigs, repairing of various Transocean rigs as well as cooperating on seven new generation jackups that are now part of Transocean’s fleet of highly sophisticated rigs.
Significance: Despite the stiffer competition in the market, Keppel’s offshore and marine unit has already secured 20 newbuild projects, including this latest order, worth about $6.4 billion in 2013.
LippoMalls 3Q13 DPU Up 19.2%
Lippo Malls Indonesia Retail Trust (LippoMalls) posted a 13.6 percent year-on-year increase in gross rental income to $39 million in 3Q13. The gain was largely attributable to contributions from six new malls acquired in 4Q12 as well as positive rental reversions within the existing malls. Subsequently, net property income and distribution per unit (DPU) for the quarter rose 12.2 percent and 19.2 percent to $37.1 million and $0.0087 apiece respectively. For its 9M13, LippoMalls recorded a 24 percent and 21.7 percent improvement in gross rental income and DPU. If measured in terms of Indonesian Rupiah (IDR), gross rental income for the 3Q13 would have increased 25 percent instead. Although the IDR depreciation had adversely affected LippoMalls’ bottom line, currency hedges were in place to mitigate the damage.
Significance: As of 30 September 2013, LippoMalls has a gearing level of 28.2 percent with 85 percent of its $472.5 million outstanding debt secured at fixed interest rates. This provides LippoMalls with plenty of headroom to take on more debt as it considers adding a portfolio of 15 malls currently being constructed by its sponsor, PT Lippo Karawaci, over the next three years.
Yoma In 2Q14 Back To Black
Yoma Strategic Holdings has reported 2Q14 earnings of $3.3 million while net profit for the six months ended 30 September 2013 also returned to postitive, at $4.4 million. This was mainly attributed to a more than two-fold increase in turnover between 2Q13 and 2Q14, from $11.6 million to $27 million as a result of a surge in sales of residences and land development rights (LDR). Revenue generated from sales of residences and LDR in 2Q14 was $26.4 million as compared to $10.8 million in 2Q13, which represents more than 90 percent of Yoma’s revenue for the corresponding quarters. As Yoma recognises revenue from the sale of development properties based on the percentage of completion method, it expects to realise $49.4 million of revenue from its Star City project within the next 15 to 21 months as construction progresses. As of 12pm on 7 November 2013, shares of Yoma are trading at $0.775, down 0.6% from its previous closing price.
Significance: Even with its business growth held back from the lack of infrastructure investment in Myanmar, Yoma continues to perform well with its development of quality residences which continues to experience strong demand supported by a positive pricing environment.
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