Month: October 2009
SingTel – BT
SingTel ups stake in Bharti Airtel
SINGAPORE Telecommunications is shoring up its stake in Bharti Airtel, India’s biggest wireless operator, to 31.95 per cent from 30.43 per cent.
In a regulatory filing yesterday, it said that wholly- owned subsidiary Pastel has agreed to buy 730,000 shares in Bharti Telecom from the Bharti Group for between 18 billion rupees (S$536.2 million) and 30.1 billion rupees in cash. Bharti Telecom holds about 45.3 per cent of the share capital of Bharti Airtel.
With this share acquisition, SingTel’s effective interest in Bharti Telecom will rise from 32.81 per cent to 36.16 per cent, and its effective interest in Bharti Airtel from 30.43 per cent to 31.95 per cent. The share transaction, subject to applicable approvals or consents being obtained, is expected to be completed on Nov 12.
SMRT – BT
SMRT’s Q2 net profit rises 24% to $52.8m
LOWER energy costs and the government’s Budget measures helped SMRT Corp to a 24.1 per cent year-on-year increase in net profit to $52.8 million for its second quarter ended Sept 30.
Measures like the Jobs Credit scheme and property tax rebates, as well as lower operating expenses, lifted profit, though this was partly offset by a fare reduction package that began on April 1.
Q2 revenue grew more slowly, edging up just 1.1 per cent to $229.4 million, mainly due to higher revenue from the operation of Circle Line Stage 3 (CCL3), increased rental revenue and higher revenue from overseas.
‘We have delivered a reasonable set of results this quarter,’ said SMRT president and chief executive Saw Phaik Hwa. ‘Looking ahead, the group’s profitability will continue to be impacted by the fare reduction package ending June 2010, lower Jobs Credit, volatility in diesel prices and the ramp-up costs to prepare for the progressive opening of the remaining Circle Line stations.’
SMRT runs Singapore’s biggest rail network, plus a smaller fleet of buses and taxis.
Revenue from train operations rose a marginal 0.4 per cent to $123.3 million in Q2 – despite the fare reduction – because of higher average daily ridership and the start of CCL3. Along with higher other operating income, operating profit rose 7 per cent to $38.7 million.
Bus revenue slipped 4.6 per cent to $51 million on lower average fare and average daily ridership. But lower diesel costs resulted in an operating profit of $1.8 million, compared with an operating loss of $1.1 million a year back.
Taxi rental revenue fell 2.6 per cent to $17.9 million in Q2 on a smaller average hired-out fleet. But taxi operations posted an operating profit of $0.8 million because of lower other operating expenses from a smaller average holding fleet.
The rental business fared better, with Q2 revenue growth of 13.1 per cent to $16.1 million on better yield and increased space at redeveloped MRT stations. Operating profit climbed 10.8 per cent to $12.7 million.
Equally robust were engineering and other services, with revenue rising 38.0 per cent to $13.4 million and operating profit soaring five times to $5.5 million on increased contribution from consultancy and overseas projects.
But advertising revenue slumped with the economic downturn and was down 9.8 per cent to $5.4 million, causing operating profit to fall 10.8 per cent to $3.4 million.
For its first half ended Sept 30, 2009, SMRT’s net profit rose 21.9 per cent to $101.0 million. But year-to-date revenue edged up only 0.5 per cent to $445.3 million.
An interim ordinary dividend of 1.75 cents per share has been declared.
Looking ahead, SMRT said that third-quarter group revenue is expected to be higher, mainly because of stronger non-fare revenue from rents and fees from overseas projects. In addition, the first payment of 240 million renminbi (S$49 million) for 49 per cent equity interest in Shenzhen Zona will be made by Q3.
SMRT – CS
2Q10 results: another pedestrian quarter
● SMRT delivered September 2009 quarter results that were largely in line with our estimates. Revenue grew 1% YoY, while earnings were up 24% YoY, due to lower fuel costs (-17% YoY), savings from the government’s Jobs Credit initiatives, and boost from other income.
● Management declared an interim dividend of S1.75cts, unchanged from the previous year, and shared further details on the recently completed Shenzhen ZONA acquisition, which is expected to contribute materially to earnings within five years.
● 6MTD revenues and earnings are at 50% and 65% of our full-year estimates, respectively. Going forward, we see costs rising in line with increased staff and maintenance expenses for the CCL Stage 3, and the new six-month electricity contract at 11% higher tariffs. Beyond factoring in contributions from other income (in FY10) and ZONA (from FY11), our forecasts are kept largely intact.
● We continue to see SMRT’s valuation at about 16x P/E as demanding versus its 14x historical average, the Singapore market, and CD, given the latter’s stronger earnings profile and China leverage. Our DCF-based target price is S$1.60 (from S$1.57). We maintain our UNDERPERFORM rating.
SingPost – BT
SingPost Q2 earnings up, helped by one-off items
Revenue up 7.9%, boosted by consolidation of Quantium turnover
SINGAPORE Post (SingPost) chalked up a net profit of $40.5 million for the second quarter ended Sept 30, up 8.3 per cent from the previous corresponding quarter.
The net earnings were higher as a 98.7 per cent fall in share of profit of associated companies and joint ventures to $40,000 from $2.97 million was more than compensated by a $2.93 million amortisation of deferred gain on intellectual property rights and a $2.13 million benefit under the government’s Jobs Credit Scheme. Without the amortisation of deferred gain (which relates to the collaboration with US-based Postea Inc), the government relief scheme and other one-off items, the group’s underlying profit fell 8.6 per cent to $35.4 million.
The three months also saw a boost from a 23.1 per cent rise in rental and property-related income to $10.1 million due to higher rental income from Singapore Post Centre and the leasing of space at re-purposed post office buildings.
Group revenue – which was strengthened by the consolidation of revenue from Quantium Solutions Group (previously known as G3 Worldwide Aspac group of companies) – increased 7.9 per cent to $130.3 million.
Quantium became wholly owned by SingPost in May this year after SingPost acquired the remaining 50 per cent stake in G3 Worldwide Aspac for $15 million.
Earnings per share (EPS) for the quarter came in at 2.104 cents per share, up from 1.943 cents. An interim dividend of 1.25 cents per share will be paid on Nov 30.
Mail revenue decreased 4.4 per cent to $87.6 million, dragged down by lower international mail contributions. Logistics revenue increased 142.6 per cent to $45.6 million, on the back of contributions from Quantium Solutions, which helped to offset lower revenue from Speedpost.
For the fiscal first half year, net profit attributable to equity-holders grew 4 per cent to $79.9 million. Excluding one-off items, underlying net profit declined 6.9 per cent to $72.3 million. Meanwhile, revenue rose 4.3 per cent to $252 million.
Group chief executive officer Wilson Tan said: ‘Although the global economy is showing signs of recovery, the postal industry typically experiences a longer recovery runway. We continue to face unrelenting pressures from the operating environment.’
However, Mr Tan also added that the group will continue to keep an eye on costs as well as pursue new growth opportunities.
SingPost closed at 93.5 cents yesterday, up by one cent.
SMRT – Nomura
First look
SMRT posted a 24% y-y rise in 2Q FY10 net profit to S$52.8mn, well ahead of our and consensus estimate of S$39mn. Higher rail margin and profits, other operating income and a lower tax rate were key reasons for the strong results. While management has guided for higher costs in 2H FY10, on the back of higher electricity rates and interest costs, we expect to adjust our FY10F upwards given the strong performance in 1H FY10. Maintain a BUY with a PT at S$1.96.
2Q FY10 well ahead