Singapore stocks to watch Friday: Singapore Airlines, CapitaLand Commercial Trust, Venture, SCI

Singapore five-dollar note Photo by Leslie Shaffer

These are the Singapore stocks to watch for Friday, May 18, 2018.

Singapore Airlines

Singapore Airlines swung to a net profit of S$181.8 million for the fiscal fourth quarter, from a year-earlier loss of S$138.3 million. Revenue for the quarter was up 8.2 percent on-year at S$4.02 billion, the carrier said in a filing to SGX after the market close.

For the full fiscal year, the company reported its net profit surged 148.1 percent on-year to S$893 million, while revenue was up 6.3 percent at S$15.81 billion. It said the increased net profit for the year was mainly due to a higher operating profit, the absence of a provision for SIA Cargo’s competition-related matters and last year’s impairment of the Tigerair brand. That was partially offset by the absence of SIA Engineering’s gain on divestment of its 10.0 percent stake in Hong Kong Aero Engines Services and related special dividends, it said.

“The parent airline company’s performance was boosted by early results from the transformation initiatives,” the company said. “The implementation of a new revenue management system, new airfare pricing structure and establishment of a centralised pricing unit, helped increase revenue, for example. Cost improvements were seen as a result of process efficiencies, and initiatives such as those to save fuel and reduce waste.”

The carrier recommended a final dividend of 30 Singapore cents a share for the full year, bringing the total dividend to 40 Singapore cents a share. That compared with a total dividend of 20 Singapore cents a share a year earlier.

But in its outlook, Singapore Airlines sounded a note of caution.

“Despite stronger advance passenger bookings for the coming months and a continued stabilisation in yields, intense competition in key operating markets and cost pressures remain,” it said. “Fuel prices have been trending higher and volatility is expected to persist in the months ahead.” It also noted that the cargo business could be subject to geopolitical uncertainties and global trade.

In a separate filing on Friday before the market open, Singapore Airlines said its regional carrier SilkAir would undergo a more than S$100 million investment program to upgrade its cabins. The upgrade will include installing lie-flat seats in business class and installing seat-back in-flight entertainment systems in both business and economy classes, it said.

Eventually, SilkAir will be merged into SIA after a sufficient number of the aircraft have been upgraded, it said. The program was expected to start in 2020, it said.

CapitaLand Commercial Trust

CapitaLand Commercial Trust said the book had been closed on its private placement of 130 million new units, with the issue price set at the top of its S$1.631 to S$1.676 range. The placement was 3.1 times covered, the REIT manager said in a filing to SGX before the market open on Friday.

The gross proceeds were around S$217.9 million and were earmarked to partially finance the acquisition of a 94.9 percent interest in Gallileo Property and transaction-related expenses.

The REIT manager requested the lifting of its trading halt.

Venture

Venture said it bought back 41,000 shares in the market on Thursday at S$20.57 to S$20.85 for a total consideration of around S$852,618. That brought the total number of shares purchased in its buyback since the authorization on April 24 to 277,000, or around 0.096 percent of the company’s issued shares excluding treasury shares, the company said in a filing to SGX after the market close on Thursday.

Shares of Venture ended Thursday down 2.26 percent at S$20.74.

Sembcorp Industries

Sembcorp Industries said that its wholly owned subsidiary Sembcorp Environment signed a deal to sell its Singapore medical waste division to TEE Medical Services for S$20 million. The sale is expected to be completed by mid-2018, the company said in a filing to SGX after the market close on Thursday.

It expected a net gain of around S$15 million for the current financial year, the filing said.

TEE Medical Services is a 50-50 joint venture between TEE Infrastructure and Asia Enviro Services, it said.