Singapore Daily Bulletin – 07/02/13

DBS Posts Record Profit In FY12
DBS Group Holdings posted a record earnings of $3.8 billion, up 26 percent from $3 billion for its full year ended 31 December 2012, which included divestment gains of $450 million. Excluding the gains from the partial divestment of its stake in the Bank of Philippines Islands, net profit rose 11 percent from the previous year to $3.4 billion. The improvement was attributed to total income hitting over $8 billion and lower allowances. Return on equity for 2012 before the one-off rose to 11.2 percent, the best in five years. However, on a quarterly basis, its 4Q12 core net profit of $760 million increased only 4 percent from $731 million a year ago as margins fell faster than expected and the lagging effect of China’s turnaround. Its net profit for the quarter was 11 percent lower than 3Q12, partly reflecting the seasonal trends.

Significance: DBS’ asset quality continues to be strong with liquidity buffers in place to protect against contingencies and support business growth. It is also well positioned to comply with the Basel III capital and liquidity requirements where DBS sits comfortably above the benchmark.

Metro Reports Three-Fold Jump In 9M13 Earnings
Metro Holdings saw its earnings leaped more than three-fold to $49.9 million for its nine months ended 31 December 2012 while revenue for the period inched up 0.5 percent to $139.5 million. For 3Q13, earnings soared 43.4 percent to $15.3 million despite revenue decreasing marginally by 2 percent to $50.6 million, dragged by the rental decline after the disposal of Metro City Beijing although its retail division performed well. Metro attributes its profits gains to a balloon payment of interest income from loan notes held by its property division, which have been liquidated in early 4Q13. Going forward, Metro will be focusing on the development of its joint venture projects: a first-of-its-kind upscale urban community development project in Nanchang, China with Top Spring, and a signature residential condominium at Prince Charles Crescent in Singapore with the Wing Tai group and UE E&C.

Significance: Despite the swell in its net earnings, Metro cautioned that its 4Q13 performance would be lower than last year’s due to the absence of the gain on disposal for Metro City Beijing in 4Q12. Furthermore, it expects more headwinds from volatile market conditions and foreign currency translation adjustments.

Midas’ JV Unit Wins Rmb710m Metro Contract
Midas Holdings announced that its joint venture unit, Nanjing SR Puzhen Rail Transport Company has won a Rmb710 million metro contract by Nanjing Metro Company. The contract encompasses the supply of 26 train sets (1 train set = 4 train cars), or 104 train cars, for the Ningtian Intercity Line Phase 1 and is slated for delivery in 2014 to 2015, ahead of the 2014 Youth Olympic Games in Nanjing. Patrick Chew, chief executive officer of Midas notes that Nanjing SR Puzhen Rail Transport has made a good start to the year, having secured two contracts over the past four weeks to boost its project portfolio to over Rmb1 billion.

Significance: Given its 32.5-percent-stake in the joint venture unit, the contract win of Rmb710 million will contribute positively to Midas’ 2014 and 2015 financial years. The company will also be able to ride on the continued opportunities from the PRC rail transportation industry.