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Singapore Daily Bulletin – 09/11/12

Wilmar Surprises Market With A 26.4% Jump In 3Q12 Earnings
A return to profitability at its oilseeds and grains unit and lower feedstock costs gave Wilmar International the boost needed to blow past analysts’ estimates. For the three months ended 30 September, the Singapore palm oil firm chalked up a 26.4 percent surge in earnings to US$405.8 million. This was well ahead of forecasts for an average US$335 million, based on a Reuters poll of five analysts. Under its oilseeds and grains segment, improved crush margin and timely purchases of raw materials led to the company recording a pre-tax profit of US$60.3 million. This came following first half pre-tax losses amounting to US$92.5 million. Further aiding Wilmar was a better performance of the company’s investment securities in the quarter. The improved bottom line was achieved despite a 5.7 percent decline in revenue to US$12.3 billion, dragged lower by lower palm prices which affected its Palm and Laurics segment. For the cumulative nine-month period, revenue edged up 2 percent to US$33.8 billion while earnings fell 29.3 percent to US$778.7 million.

Significance: The local market welcomed the news as shares of Wilmar started trading 2.6 percent higher at $3.20 over yesterday closing price of $3.12. Among the 23 analysts tracking the company compiled by FactSet, there were three ‘Buy’ ratings, 14 ‘Hold’ ratings and 6 ‘Sell’ ratings.

Noble’s 3Q12 Results Falls Short Of Expectation Despite Rebound
Commodity trader Noble Group’s performance for the July to September period missed market projections as net profit came in at US$75.2 million against the US$154.6 million mean estimate of seven analysts surveyed by Bloomberg. The performance was however, a marked improvement compared with the previous corresponding period which turned in US$17.5 million in losses. The company managed to reap benefits from higher business activities at both its Energy as well as Metals, Minerals and Ores divisions which recorded higher revenue contributions and operating income margins. This led to an 8.7 percent gain in revenue for the quarter. Still, these results were partially offset by weaker Agriculture performance affected by modest year-on-year tonnage decline and poor crush conditions in China. For the first nine months, earnings rose 16.8 percent to US$380.1 million in tandem with a 15.1 percent climb in revenue to US$69.8 billion.

Significance: In spite of continued poor crush conditions seen in China market, Richard Samuel Elman, the chairman of Noble, opined that the market will provide the company tremendous opportunities in the long run.

TEE International Inks MOU, Makes Foray Into Myanmar’s Cement Industry
TEE International, an engineering and integrated real estate group, announced the signing of a Memorandum of Understanding (MOU) with Ayeyarwaddy Cement Co in a filing with Singapore Exchange earlier this morning. Ayeyarwaddy Cement Co is part of a larger group named A1 Group of Companies which is a leading conglomerate in Myanmar with businesses in various industries. The negotiations will surround the set up a joint venture firm to develop and operate a 3,000-tonne integrated cement plant on a total area of 1,100 acres located in Ngaputaw Township, Republic of the Union of Myanmar. TEE will most likely be the lead for the engineering, procurement & construction as well as mechanical & electrical portions, with A1 Group of Companies undertaking the building and civil works pertaining to the plant. At present, TEE intends to take a controlling stake in the proposed venture. Both parties aim to enter into a joint venture by 31 July 2013.

Significance: Commenting on the firm’s first foray into Myanmar, Phua Chian Kin, the chief executive officer of TEE, deemed Myanmar as an emerging country with huge economic potential in terms of demand for cement that will stem from various business in the future. He also emphasized on the importance of collaborating with credible local partners such as A1 Group.