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Stocks In Focus (Sabana Shari’ah Compliant Industrial REIT, Ezion Holdings, KSH Holdings) – 19/04/13
Sabana REIT’s 1Q13 Gross Revenue & Distributable Income Up 9.5% & 7.1%
Sabana Shari’ah Compliant Industrial Real Estate Investment Trust (Sabana REIT) announced that both its gross revenue and net property income for the first quarter ended 31 March increased 9.5 percent to $21.5 million and $20.3 million respectively. The improved performance is led by the acquisition of 23 Serangoon North Avenue 5 in 4Q12, which has started to contribute to the rental income. Correspondingly, the trust achieved a 7.1 percent jump in distributable income to $15.5 million with distribution per unit increasing 6.6 percent to $0.0241 from $0.0226 in 1Q12. As at 31 March, Sabana REIT’s portfolio consisted of 21 properties with total asset value of $1.2 billion and total portfolio occupancy was 99.9 percent. Kevin Xayaraj, chief executive officer of Sabana REIT’s manager commented, “We’re pleased to achieve a positive year-on-year growth… [and] will continue to remain focused in our approach in building up Sabana Reit’s portfolio with yield-accretive acquisitions, as well as by proactively managing our capital structure.”
Significance: While the global economy’s outlook and Singapore industrial property market seems subdued, Sabana REIT remains positive on its performance for FY13. Its establishment of a Syariah-compliant $500 million Multicurrency Islamic Certificates Issuance Programme would diversify its funding sources and improve financing flexibility for future acquisitions, development projects and asset-enhancement initiatives.
Ezion Continues Deal Momentum With US$148.6m Win
Ezion Holdings, with its joint venture partner, Kim Seng Holdings, has further secured a contract with an approximate value of up to US$148.6 million. The contract involves providing a service rig over a seven year period to a national oil major in Central America, believed to be Pemex, to support the oil and gas activities. The service rig is a used rig, which has been acquired by the joint venture entity, and is being upgraded. It is expected to be ready for Ezion’s client in the third quarter of 2013 and will be deployed in the Bay of Campeche in the Gulf of Mexico. OSK Research estimates the investment for the service rig to be US$80 million, which would be funded by US$56 million debt and US$24 million equity.
Significance: To date, Ezion has bagged multi-year contracts for service rigs, jack-up rigs and liftboats to oil companies totalling US$364.5 million. DBS Research estimates the full year net profit contribution from this latest contract win to be about US$10.2 million.
KSH Wins Rmb157m Beijing Construction Project
KSH Holdings has been awarded a construction contract worth approximately Rmb157 million by Beijing Jin Hua Tong Da Real Estate Development Company for the construction of Liang Jing Ming Ju Phase Four. The project is a mixed property development project comprising four blocks of condominiums with office and commercial units. KSH’s 50-percent owned Sino-Singapore Kim Seng Heng (Beijing) Engineering Construction Company, will be erecting three blocks of residential building, which will commence immediately over a duration of 25 months. Choo Chee Onn, executive chairman and managing director of KSH, was delighted to share the contract win, which represents the company’s maiden construction project it undertakes in China.
Significance: KSH’s foray into the property and construction business in China could spell more opportunities for growth in the huge China market where demand is strong.
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