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Stocks In Focus SG (Sabana REIT, COSCO, Ley Choon) – 18/07/13
2Q13 DPU For Sabana REIT Up 5.7%
The world’s largest listed Shari’ah Compliant real estate investment trust (REIT) Sabana Shari’ah Compliant REIT posted solid performance in the second quarter ended 30 June 2013. For the quarter, net property income climbed 6 percent to $20.2 million on a 5.9 percent growth in gross revenue, driven by new contribution from a purchase made in October. Increase in the net change in fair value of financial derivatives was another booster as income available for distribution rose 7.5 percent to $15.6 million from $14.5 million in the previous corresponding period. This translates to a distribution per unit of 2.40 cents, 5.7 percent higher than that of 2Q12 and comparable to 1Q13, despite a much larger unit base of 649.7 million units in issue and to be issued as at 30 June 2013. Sabana REIT’s portfolio of 21 properties, valued at $1.2 billion, are fully occupied as at the end of 2Q13.
Significance: In the next few months, Sabana REIT will be working on the renewal of five three-year master leases, which will expire in November 2013. These master leases contributed close to 45 percent of the REIT’s gross revenue. It expects to successfully renew at least one master lease and negotiations with the remaining four master lessees are on‐going.
COSCO Wins US$200m Vessel Order
COSCO Corporation (Singapore) announced that the subsidiary of its 51 percent-owned [H1] COSCO Shipyard Group, COSCO (Nantong) Shipyard, secured a US$200 million contract from Mexico-incorporated Cotemar S.A. de C.V. to build a harsh-environment semi-submersible accommodation vessel designed to operate in the Santos Basin, Gulf of Mexico and in the North Sea. This marks COSCO’s second contract with Cotemar who previously ordered the same GustoMSC Ocean500 semi-submersible accommodation vessel for US$200 million to be built at COSCO (Nantong) Shipyard, last May. Notably, the delivery period is much shorter at 24 months compared to the first deal which was to be delivered within 30 months. As at 31 March 2013, COSCO’s order book stood at approximately US$6.4 billion.
Significance: The second contract won awarded by Cotemar indicates the strong competitiveness in COSCO’s vessel design and construction of vessel to meet the requirements of its customers. With Mexican national oil company Pemex revealing its plans to add between eight to 12 offshore platform to its drilling fleet, COSCO is expected to put up a good fight against competitors like Keppel Corporation and Ezra Holdings.
Ley Choon Wins B$29.6m Project In Brunei
Ley Choon Group Holdings announced that Ley Choon EWC, its 51 percent subsidiary in Brunei, has secured B$29.6 million worth of new contracts. The contracts comprise of the construction of a flyover bridge at Jalan Gadong, Jalan Telanai and infrastructure works involving the supply and installation of sewerage systems at Berangan, Kianggeh and Subok, Brunei. “Winning these latest contracts not only added a valuable new client to our established clientele base, but has also given us an opportunity to showcase our abilities in road construction as we embark on our first flyover bridge construction. Ley Choon’s concerted efforts to extend its client base and tap new opportunities in Brunei have achieved results and we will continue to expand our footprint and strengthen our market position in Brunei,” cited executive chairman and chief executive officer of Ley Choon, Toh Choo Huat.
Significance: The project marks a significant milestone for Ley Choon since the start of its oversea venture in Brunei in late 2011. The group has since secured six contracts worth approximately $54 million in Brunei.
[H1]COSCO has a 51% stake in COSCO Shipyard Group Co while Cosco (Nantong) Shipyard is a subsi of COSCO Shipyard Group Co.
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