Singapore stocks to watch Thursday: Singtel, CapitaLand Commercial Trust, Keppel

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These are the Singapore stocks to watch for Thursday, May 17, 2018.

Singtel

Singtel reported fiscal fourth-quarter net profit of S$780.6 million, down 19.0 percent on-year, while revenue rose 0.4 percent on-year to S$4.33 billion. That was mainly on weaker results from Airtel and Telkomsel and “adverse currency movements,” the company said in a filing to SGX before the market open on Thursday.

For the full fiscal year, the telco reported net profit climbed 42.2 percent on-year to S$5.45 billion, while revenue rose 4.9 percent to S$17.53 billion. The full-year results were bolstered by gains from the divestment of NetLink Trust and its core business’ strong performance. But it noted underlying net profit for the year fell 8 percent on a lower share of Airtel profit and a lower interest in NetLink Trust, in addition to higher depreciation and amortization on spectrum and network investments.

Singtel said Airtel’s results were hurt by intense competition amid a new player’s aggressive pricing, combined with India’s mandated cuts in mobile termination rates.

In its outlook statement, Singtel said it expected consolidated revenue to grow by a “low single digit,” excluding the impact of Australian NBN migration revenue, while it forecast earnings before interest, tax, depreciation and amortization (EBITDA) would be stable. It said Australian mobile service revenue was expected to grow by a low single digit, while Singapore mobile service revenue was forecast to fall by a “mid-single digit.”

Singtel said it was recommending a final dividend of 10.7 Singapore cents, for a total dividend of 17.5 Singapore cents for the year, and it added that it expects ordinary dividends of 17.5 Singapore cents a share for the next two financial years.

Keppel Corp.

Keppel Offshore & Marine subsidiary Keppel Singmarine landed contracts from Van Oord to build two high-specification trailing suction hopper dredgers (TSHDs), the company said in a filing to SGX after the market close on Wednesday.

The two dredgers are expected to be completed in the fourth quarter of 2020 and the second quarter of 2021, respectively, with Van Oord having an option to order a third dredger within a year, the filing said. TSHDs are mainly used for dredging loose and soft soils, such as sand, gravel, silt or clay, the filing said.

The announcement came just hours after Keppel said before the market open on Wednesday that it had inked a master agreement to sell five existing jackup rigs to a single buyer. After the market close on Wednesday, Keppel said the agreement had become effective.

In that filing, Keppel said two of the rigs were originally built for Grupo R and one for Falcon Energy Group, with Keppel FELS already terminating the respective owners’ contracts. The other two rigs were being built in anticipation of expected demand, it said.

CapitaLand Commercial Trust and CapitaLand

CapitaLand Commercial Trust requested a trading halt before the start of trade on Thursday to announced that it made its first European acquisition.

The REIT manager said it acquired a 94.9 percent stake in a Grade A commercial property in Frankfurt, Germany, which has an agreed property value of 356.0 million euros, or around S$569.6 million, for 100 percent of the property. CapitaLand will hold the remaining 5.1 percent stake in the property, known as Gallileo in Frankfurt’s central business district.

The acquisition is expected to be completed in June.

“Expanding overseas is a strategic move to deliver long-term sustainable distribution growth to our unitholders and inject diversity to the portfolio. CCT will remain predominantly Singapore focused and will look to allocate between 10 percent to 20 percent of its deposited property overseas,” Kevin Chee, CEO and manager of CCT, said in the SGX filing before the market open on Thursday. “Germany is a key focus for CCT given the depth of good quality investment grade commercial assets.”

He said the Gallileo property had an “attractive” net property income yield of 4.0 percent, based on its 2017 net property income on 100 percent occupancy and valuation at the end of the first quarter. After the acquisition, the REIT’s portfolio will have a 5 percent exposure to Germany, he said, while the acquisition is expected to increase pro forma first-quarter distribution per unit (DPU) by 1.4 percent, to 2.15 Singapore cents, from 2.12 Singapore cents.

The REIT said in a separate filing that it proposed a private placement of 130 million new units in CCT at S$1.631 to S$1.676 per new unit to raise gross proceeds of at least S$212.0 million. Around S$208.7 million of the proceeds were earmarked to partially finance the Gallileo property, with S$3.3 million to pay the transaction-related expenses for the private placement.

The REIT will fund the rest of the acquisition via bank borrowings.

SATS

SATS said that its subsidiary SATS Airport Services entered a joint venture agreement with Jet Aviation (Asia Pacific) and Universal Singapore Airport Services to set up a company in Singapore to provide terminal management servvices to the Seletar Airport Business Aviation Center.

The SATS subsidiary will hold 52 percent of the joint venture, while Jet Aviation (Asia Pacific) and Universal Singapore Airport Services will hold 24 percent each, SATS said in a filing to SGX after the market close on Wednesday.

The paid-up capital for the joint venture is S$2.8 million, and was based on business needs and initial working capital requirements, it said.

This item has been updated to correct the date.