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Stocks In Focus SG (Ascendas REIT, Midas, Keppel Land) – 17/10/13
A-REIT’s 1H14 Gross Revenue Rises 6.1%; Distributable Income Jumps 10.3%
For the six months ended 30 September 2013, Ascendas Real Estate Investment Trust’s (A-REIT) gross revenue went up 6.1 percent to $302.6 million due to the recognition of rental income earned from The Galen, which was acquired at the end of FY13, and finance lease interest income received from a tenant. Additionally, A-REIT recorded positive rental reversion, averaging 10.8 percent for leases renewed in 2Q14 across all segments, contributing to the improvement. Net property income for the half-year period increased 5.4 percent to $215.1 million while total amount available for distribution jumped 10.3 percent to $171.6 million. For the quarter, amount available for distribution increased 9.3 percent to $86.4 million and distribution per unit grew 2 percent from 3.53 cents in 2Q13 to 3.6 cents in 2Q14. A-REIT also maintained a strong balance sheet with aggregate leverage at 29.7 percent.
Significance: A-REIT expects to continue benefiting from the rental reversions for the remainder of the financial year, albeit at a more modest rate, as about 10.5 percent of its property income is due for renewal. Weighted average lease to expiry for its portfolio is around 3.9 years, providing stability and predictability in earnings.
Midas Win Contracts Worth $45m
Contract for train projects in Europe and China have been clinched by Midas Holdings. The Europe contract is worth some 17.7 million euros ($30 million) and the China contracts are worth some 75.9 million yuan ($15.5 million). The European contracts are for two major train projects in Europe, with delivery between 2013 and 2017. The Europe wins increase Midas’ year-to-date orders from the international market to more than 50 million euros. Chief executive officer Patrick Chew said in a statement that the China wins underpin the railway industry’s growth story, and is reflective of its continuing leadership position in China. The latest contracts are expected to contribute positively to Midas’ financial performance this year through to 2017. Midas was named as one of DMG’s top 30 small-cap companies.
Significance: Lynette Tan from DMG expects the outlook for the industry remains positive and Midas has a market share of 66 percent in the aluminium alloy profiles segment in China. Andy Wong from OCBC Investment Research expects Midas to win some high speed contracts in the last three months of 2013.
3Q13 Net Profit Jumps 70% To $126.4m For Keppel Land
Keppel Land reported a 69.7 percent jump in its 3Q13 profits to $126.4 million, mainly attributable to stronger contributions from its property trading, property investments and fund management segments. This also translates to an earnings per share of 8.2 cents for 3Q13, as compared to the earnings per share of 4.9 cents in 3Q12. Strong sales were also seen in 3Q13, where revenue showed a 151.1 percent increase to $417.9 million. Despite the increased cost of sales that followed as a result of higher revenue, the strong sales helped gross profits grow 159.6 percent to $120.3 million in 3Q13. For the nine months ended 30 September 2013, the registered net profit was 2.4 percent higher than that in the previous year, at $318.6 million.
Significance: The significantly stronger revenue was mainly recognised from its property trading segment, with more project completions in China and the progressive recognition of revenue from its Singapore projects, on top of higher contributions from the property investment and fund management segments. Rolling this performance forward, with everything held constant, this might just translate to an even better push for its FY13 results.
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