SIA 4Q13 Profit Returns To The Black; Operating Loss Deeper In The Red
For the fourth quarter ended 31 March, Singapore Airlines (SIA) returned to the black with profit of $68.3 million against a net loss of $38.2 million in 4Q12, boosted by a $54.7 million gain on disposal of aircraft, spares and spare engines. Even so, operating loss for the period widened to $44.2 million compared to $5.2 million in 4Q12 as Middle Eastern carriers and low-cost players encroached on SIA’s airspace and it continues to be plagued by persistently high fuel prices and lower yields amidst weak global economic conditions. Net profit for FY13 improved 12.8 percent year-on-year to $378.9 million on the back of a 1.6 percent rise in revenue to $15.1 billion as passenger carriage grew 7.3 percent, albeit at lower yields due to promotional activities prompted by intense competition and the depreciation of revenue-generating currencies against the Singapore dollar. Particularly, SIA Cargo was the only company in the group which reported a wider operating loss to $167 million.
Significance: SIA notes that yields are likely to remain under pressure amidst the weak economic sentiment and revenues will be further diluted if key revenue-generating currencies continue to depreciate. Its cargo business also continues to face overcapacity issues.
King Wan Bags $28.4m Worth Of New Contracts
King Wan Corporation announced that its wholly-owned subsidiary, King Wan Construction, has secured six new mechanical and electrical (M&E) contracts in Singapore worth $28.4 million during the period from February to May. The contracts secured include air conditioning projects for The Scotts Tower and Fulcrum @ Fort Road, as well as plumbing and sanitary projects for four housing projects. Chua Eng Eng, managing director of King Wan, was pleased to share that the company was able to win these contracts in the midst of a competitive business environment. She added that the wins demonstrate King Wan’s strength as a reputable integrated building services and M&E services provider.
Significance: With the six contract wins, King Wan’s order book stands at $183.6 million that will ensure a steady revenue stream, which is expected to last till 2016.
Tat Hong and Intraco To Set Up JV For Myanmar
Tat Hong Holdings and Intraco along with Myanmar businessman Aung Moe Kyaw entered into a non-binding heads of agreement to start a joint venture (JV) in Singapore to go into the crane leasing and distribution business in Myanmar. The JV will have an initial paid-up capital of US$3 million with Intraco and Tat Hong each owning 40 percent of the company, while Aung will hold the remaining 20 percent. According to the agreement, both Tat Hong and Intraco will contribute US$1.2 million each towards the JV with funds sourced internally. Intraco shall incubate and operate the company while Tat Hong will be providing the know-how and expertise to the operations and business from its experience in the crane industry. The largest shareholder of Intraco is TH Investments, the same investment vehicle of the family that controls Tat Hong. Aung is a prominent businessman from Myanmar who owns several businesses and is involved in several local trade organisations; he is expected to contribute his knowledge of Myanmar regulations and market practices.
Significance: The JV will give Tat Hong and Intraco an opportunity to gain exposure to the leasing and distribution of crane business in Myanmar at a time when Myanmar is poised for a period of rising economic growth. However, being a non-binding heads of agreement, there is no obligation for the parties involved to start this venture.
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