Singapore stocks to watch Friday: Keppel, SATS, CapitaLand Mall Trust

Singapore one dollar bill

 

Keppel Corp

Keppel Corporation posted a 44% rise in second quarter net profit and said it will pay a higher dividend for the half year to June.

Keppel said after the market’s close on Thursday it earned S$246 million in the three months ended June, up from S$171 million in the same period last year. The increased earnings were due to higher profits at its property and infrastructure divisions.

Its offshore and marine arm – the world’s biggest offshore rig builder – slipped into the red, however, posting a pretax loss of S$11 million for the quarter. The division had earned S$15 million in April-June 2017.

Looking ahead, Keppel said there is growing optimism in the O&M industry, with Brent crude prices hovering above US$70 per barrel. “However, the rig market continues to be weighed down by a supply overhang. Rig utilization has improved, but day-rates have remained stagnant,” it added.

Keppel said it will pay an interim dividend of 10.0 Singapore cents per share for first half 2018, higher than the 8.0 Singapore cents per share for the first half of 2017.The group will also pay a special dividend of 5.0 Singapore cents a share to mark its 50th anniversary.

Read more: Keppel Corp second-quarter net profit rises on stronger property and infrastructure earnings

SATS

SATS reported on Thursday that its fiscal first quarter net profit rose 11.5% on-year to S$63.9 million, with the company pointing to continued growth in aviation volumes, revenue growth in Japan and at the Singapore cruise terminal and improved productivity.

Revenue for the quarter ended 30 June rose 3.0% on-year to S$439.4 million, it said in a filing to SGX after the market close on Thursday.

The food-services revenue rose 2.7% on-year in the quarter to S$239.5 million, while gateway services’ revenue increased 3.4% to S$199.6 million, it said.

The company issued a generally positive outlook.

Read more: SATS reports first-quarter net profit rose 11.5 percent on-year as aviation volumes rise

SIA Engineering

SIA Engineering, the aircraft maintenance arm of flag carrier Singapore Airlines, posted on Thursday a 10% rise in fiscal first quarter net profit on the back of higher contributions from associated and joint venture companies.

Net profit for the three months to June was S$40.5 million compared to $36.7 million in the year-ago period. Revenue fell 5.5% to S$257.7 million mainly due to lower income from airframe and fleet management.

SIA Engineering said the aircraft maintenance, repair and overhaul business remains challenging, but the group will continue to benefit from its strategic partnerships.

CapitaLand Mall Trust

CapitaLand Mall Trust, Singapore’s biggest shopping mall owner, announced on Friday morning a distribution per unit (DPU) of 2.81 Singapore cents for the three months ended June, a rise of 2.2% from the second quarter of 2017.

Distributable income for the period was S$100.0 million, an increase of 2.9% over the S$97.2 million for the year-ago quarter.

“CMT overcame soft market conditions to deliver another set of stable results for 2Q 2018. Underpinned by our well-located shopping malls and proactive asset management, CMT’s portfolio occupancy remained resilient at 98.0% as at 30 June 2018, well above the average market occupancy of 92.5%,” Tony Tan, the CEO of CMT’s management company, said in a statement.

He added that the divestment of Sembawang Shopping Centre during the quarter allowed the trust to repay existing borrowings, leading to improved financial flexibility for CMT and a lower gearing of 31.5%.

Going forward, CMT said it will continue to focus on sustaining DPU amid slowing economic growth in Singapore.

Olam International

Olam International announced on Thursday its wholly-owned subsidiary Olam Americas Inc. (OAI) has placed US$100 million worth of five-year fixed rate notes to four investors in the U.S. at a spread of 160 basis points over the five-year U.S. treasury rate.

The pricing translates to a fixed coupon of 4.35% over the five years.

OAI and its US affiliates will use proceeds from the notes issue to repay existing debt and for general corporate purposes.

Hyflux

Eight groups have expressed interest in buying the Tuaspring desalination and power plant from troubled Singapore water company Hyflux, CEO Olivia Lum told local media on Thursday.

The groups are at different stages of the bidding process. Proceeds from the sale of Tuaspring will help Hyflux clear some of its debts.

Hyflux shares remain suspended from trading and the company is under court protection from creditors.

Jardine Cycle & Carriage

Jardine Cycle & Carriage has bought an additional 2.2 million shares in Vietnamese automobile company Truong Hai Auto Corporation (THACO) from third party vendors, increasing its stake from 25.16% to 25.30%.

The outlay cost the company 161.6 billion Vietnamese dong which is approximately US$7.0 million, JC&C said in a statement after the close of trading on Thursday.

JC&C is the distributor for Mercedes-Benz vehicles in Singapore, Malaysia and Myanmar. It also owns large stakes in several companies including Indonesian automobile group Astra International and Vietnam’s Vinamilk. Jardine Matheson, a diversified business group focused principally on Asia, is the biggest shareholder of JC&C with around 75%.

Clearbridge Health

Clearbridge Health said on Thursday its associated company, Clearbridge BioMedics, has completed a S$6.6 million fundraising exercise and has appointed professional parties to advise on a potential listing.

Clearbridge Health provides laboratory testing services and has investments in precision medical technology companies in more than 10 countries around the world.

Singapore Exchange

Singapore Exchange said in a filing on Thursday that it is seeking public feedback on proposed changes to the rules of Singapore Exchange Derivatives Clearing, or SGX-DC, and the Central Depository Pte., or CDP.

“SGX’s primary remit of upholding the health and efficiency of Singapore’s financial market means we have a duty to ensure the continuity of the broader market in the event a clearing member defaults, Agnes Koh, head of risk management at Singapore Exchange, said in the statement. “We are constantly reviewing and enhancing our risk management practices.”

The proposals include introducing an auction protocol for liquidating a defaulted SGX-DC Clearing member’s positions in exchange-traded derivatives contracts and over-the-counter commodities contracts and a loss-distribution mechanism to address losses arising from the auction.

It also proposed allowing SGX-DC to unilaterally terminate the positions of non-defaulting SGX-DC Clearing members that exactly offset defaulted clearing members.

SGX proposed revising the loss-distribution mechanism for auctions of over-the-counter financial derivatives contracts and modifying the SGX-DC Clearing Fund “waterfall” which allocates losses arising from a default, by incorporating “sub-waterfalls” for allocating losses from the auctions.

It also proposed changing CDP Clearing Rules to give CDP the power to write off, as a loss to itself, a defaulted CDP clearing member’s unsettled buy trades if those securities are not force-sold by the seventh day after the clearing member is declared to be in default.

Singapore Post

Singapore Post said on Thursday that it purchased 790,000 shares in the market at S$1.34 to S$1.35 each for a total consideration, including other costs, of S$1.057 million.

Since the 11 July 2018 start of the buyback mandate, SingPost has bought back 1.59 million shares, or 0.0702 percent of the issued shares excluding treasury shares, it said in a filing to SGX after the market close on Thursday.