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Stocks In Focus SG (Keppel Corp, Mapletree Logistics Trust, Ezion) – 19/07/13
Keppel Corp’s 1H13 Profit Down 44.7%
Keppel Corporation announced a 33.4 percent fall in profit to $346.8 million from $520.9 million for the second quarter ended 30 June. This was due to the absence of the one-time gains from the delivery of the Reflections by Keppel Bay units. Revenue in 2Q13 also retreated 11.7 percent to $3.1 billion from $3.5 billion due to a fall in contribution from Keppel’s property and offshore and marine divisions. For the half year period, profit fell 44.7 percent to $703.8 million on the back of a 24.7 percent drop in revenue to $5.8 billion. Chief executive officer, Choo Chiau Beng, who also announced that he would be succeeded by chief financial officer, Loh Chin Hua, noted that excluding the gains from the Reflections units, performance in 1H13 is comparable to 1H12. Keppel will be paying an interim dividend of about $0.208 a share, comprising a cash dividend of $0.10 and an in-specie dividend of Keppel REIT units amounting to $0.108 per share.
Significance: Keppel cautioned on the challenges ahead given the anaemic global economy. Nonetheless, the company will continue to build up its edge in offshore and marine as Keppel O&M has secured $1.3 billion of orders in 2Q13 and has seen a pick-up in orders and interest from Mexico.
Mapletree Logistics Trust’s 1Q14 Distribution Per Unit Rises 5.9%
Mapletree Logistics Trust (MLT) posted improved results for the first quarter ended 30 June, with amount available for distribution increasing 6.2 percent to $48.7 million and distribution per unit rising 5.9 percent to $0.018 from $0.017 a year ago. This was largely brought about by a net gain of $4.96 million from the divestment of 30 Woodlands Loop, which will be distributed out to shareholders over eight quarters. Gross revenue for the quarter declined 2.2 percent to $75.4 million, mainly due to the weaker Japanese yen. Excluding the impact from the foreign currency translation, gross revenue would have increased by $2.4 million due to contributions from an enlarged portfolio as well as positive rental reversions from Singapore and Hong Kong. Notably, the impact of the Japanese yen depreciation on distributable income was mitigated by currency hedges as income stream from Japan is substantially hedged. As at 30 June, MLT’s properties maintained an occupancy rate of 98.2 percent.
Significance: Despite MLT’s positive performance, the foreign exchange volatility may persist in the near term and could likely have an impact on distributable income although it is actively managing this problem through hedging.
Ezion Receives Letter Of Intent Worth US$82.1m
Ezion Holdings announced that it has received a letter of intent (LOI) with a value of up to US$82.1 million over five years, to provide a service rig to a national oil firm in South-east Asia. The company would also order an additional service rig to meet the requirement of the LOI and is expected to be deployed and working in the South-east Asian waters by late 1Q15. Meanwhile, OSK-DMG notes that Ezion will be investing US$60 million in a new liftboat, which will be partly financed by a proposed issue of redeemable exchangeable preference shares by a wholly owned subsidiary of Ezion, as well as bank borrowings. The 300 preference shares to be issued will be at a price of $100,000 apiece and will raise net proceeds of about $29.5 million. The shares would be issued to five funds: Evia Growth Opportunities II, Evia Growth Opportunities III, Venstar Investments, Venstar Investments II and Venstar Investments III.
Significance: Ezion has been enjoying a healthy order momentum this year, which will help provide earnings visibility in the coming years. OSK-DMG said it still expects earnings per share to swell by 47 percent in compounded annual growth rate over the fiscal years of 2013 to 2015 and maintains its “buy” rating with a target price of $3.
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