Month: October 2008
SingPost – BT
SingPost Group on Thursday said net profit declined 5.6 per cent to $37.4 million in its second quarter ended September 2008. Excluding one-off items, underlying net profit was higher by 11.4 per cent at $38.7 million.
The group registered a 4.1 per cent growth in revenue to $120.7 million in the second quarter, with improved performances across all its three business segments
Mail revenue grew 2.8 per cent to $91.7 million, from higher contributions from its business lines – domestic mail, international mail, hybrid mail and the philatelic business.Logistics revenue was up 6.4 per cent to $18.8 million, on growth in its Speedpost and vPOST shipping transactions and warehousing, fulfilment and distribution. During the
Retail business posted an 8.6 per cent increase in revenue to S$16.6 million, driven mainly by continued growth in financial services, particularly remittances. The group’s rental and property-related income for the second quarter increased by 39.3 per cent to $8.2 million, on the back of higher rental income from Singapore Post Centre.
SingTel – BT
Index-linked selling pushes SingTel down 9.6%
At $2.06 – its lowest since Feb 2004 – it’s cheaper than rival StarHub
A SINGTEL share is now cheaper than a StarHub share, after investors dumped SingTel’s stock yesterday in index-linked selling.
While concerns of Aussie-dollar weakness and slowing earnings growth have added to bearish sentiment on the SingTel stock, dealers said the sell-off was largely triggered by selling of index stocks.
SingTel slipped 9.6 per cent to $2.06 – its lowest price since February 2004 – on active volume of 43.08 million shares. StarHub closed at $2.10.
‘The market is pessimistic and is using SingTel as a proxy because that’s the most liquid stock,’ said OCBC analyst Carey Wong. ‘That’s part and parcel of being in the main index and by far having the largest market cap and being the heaviest weight in the index.’ He has a ‘buy’ call on SingTel but is placing his rating under review pending fiscal Q2 results due on Nov 12. Mr Wong is looking for more clarity on SingTel’s Australian business Optus but believes that the worst of forex losses is behind SingTel.
Yesterday afternoon, news broke that Australian-based Soul, the former SP Telemedia, has withdrawn from a SingTel-led group bidding to build Australia’s national high-speed Internet network – the second company to do so after Telecom Corp quit last week. This may undermine the consortium’s chances of success.
Analysts believe that yesterday’s share sell-off had less to do with SingTel’s fundamentals, although there has been some bad news recently. SingTel said earlier this week that Optus will cull 115 jobs from its key Optus Networks division, which oversees the deployment and maintenance of wireless and fixed-line infrastructure. SingTel has imposed a headcount freeze in Singapore and introduced cost-cutting measures.
A local tech analyst noted that SingTel’s fundamentals remain relatively better than those in many other sectors and that its earnings are more resilient than those of other telcos.
But recent expenses, such as sponsorship of the Formula One Grand Prix and the initial cost incurred in carrying Apple’s iPhone, could add to woes of rising costs and eroding margins.
Analysts have trimmed their forecasts for SingTel to price in the impact of the economic slowdown. They expect higher costs and slower revenue growth in FY09.
Noting that SingTel faces earnings pressure domestically and overseas, DBS Vickers analyst Sachin Mittal trimmed his FY09 and FY10 earnings forecasts by 5.5 per cent and 7.5 per cent respectively to price in potentially disappointing growth at India’s Bharti next year and lower corporate spending in Singapore. He maintained a ‘hold’ call on the stock.
ABN Amro analysts Ian Martin and Arthur Pineda said in a report that they are cutting their forecasts for revenue growth and margin gain at Optus in the context of an economic slowdown. ‘We believe negative risks are more evident than positive ones,’ they said. ‘Negative risks include a more rapid slowdown in revenue growth in Singapore and among associates.’
They changed their rating on the stock to ‘hold’ from ‘sell’, given the sharper than expected fall in the share price.
SFI – BT
S’pore to develop ‘food zone’ in Jilin
SFI project will breed pigs, process and export pork
SINGAPORE is beefing up efforts to ensure its food security for the long term, with discussions underway to see how to best develop a ‘food zone’ in Jilin province in China.
Sharing these plans with Singapore reporters yesterday, Prime Minister Lee Hsien Loong said that the aim was to build an integrated facility in Jilin city, located in the north-eastern part of China. There, pigs would be bred and farmed, with the pork eventually processed and then exported.
‘This is a commercial project between our Singapore Food Industries (SFI) and the Jilin city government, and we have just signed a MOU (memorandum of understanding),’ said Mr Lee, who is in Beijing to attend the two-day Asia-Europe Meeting which begins today.
This first-of-its-kind project for Singapore came up during bilateral discussions that Mr Lee held with Chinese leaders yesterday, just after he witnessed the signing of the China-Singapore free trade agreement (FTA).
‘As (Chinese Premier) Wen Jiabao said to me, we can develop this and make it successful. Both countries can cooperate on issues of quality and safety in food,’ said Mr Lee.
National Development Minister Mah Bow Tan, who is also in Beijing as part of Mr Lee’s delegation, said that the go-ahead for the project would depend on the results of a joint feasibility study that is expected to be completed in the next six to 12 months.
‘In the long term, our goal is to provide a supply of food not just for the local consumption, but also for export to Singapore, in line with our overall objective of ensuring food security,’ said Mr Mah.
If successful, the Jilin food zone, in the initial phase alone where it would occupy five to 10 square km of land, could supply up to 10 per cent of Singapore’s total pork demand, said Mr Mah.
SFI is a government-linked company. The food zone project will be driven by the private sector, with SFI likely to rope in several partners to form a consortium. The Agri-food and Veterinary Authority (AVA) will take on the role of food safety regulator.
While a pig farm is the most ideal way to kick things off, the food zone could well expand to include chicken farming and other products in the longer run.
‘Currently, Singapore is buying food from many countries and diversifying its resources to ensure a steady stream of food coming in. Of late, the government has been studying this strategy to see how to build on this and go upstream and get involved in the production of food,’ said Mr Mah.
‘This food zone project fits in very nicely with that strategy,’ he added. ‘It can be one of the major suppliers of pork in Singapore, and help significantly in our food resilience.’
SFI – BT
Ambrosia Investments mulls SFI stake sale
The subsidiary of Temasek-linked ST is evaluating options
Ambrosia Investments, a wholly owned subsidiary of Temasek-linked Singapore Technologies, is evaluating options regarding its stake in Singapore Food Industries Limited (SFI).
Ambrosia Investments holds a 69.68 per cent stake in SFI, making it the company’s majority shareholder.
SFI chief Roger Yeo told BT that he was not sure if Temasek was looking to sell off its stake. However, referring to comments by Temasek in a Bloomberg report yesterday, he said that it seemed Temasek was ‘thinking of a sale’.
In the report, Bloomberg quoted Temasek’s managing director of investments, David Heng, as saying that Temasek was exploring its options ‘with the aim of unlocking shareholder value and optimising returns’. No decision on the stake has been made, Mr Heng added.
‘The Board would like to caution that there is no assurance that any transaction will materialise arising from the evaluation. Further announcements will be released if and when appropriate,’ SFI said in an announcement yesterday. It also advised shareholders and investors to exercise caution in their dealings in the company’s shares.
The statement was in response to a query dated Oct 22 by the Singapore Exchange, as there had been a substantial increase in share price on that day. On Wednesday, its share price hit a high of 82 cents from an opening price of 74.5 cents, before closing at 80 cents. SFI closed at 82 cents yesterday, up two cents.
In the statement, SFI also pointed to an MOU signed by its subsidiary, SFI Manufacturing Pte Ltd, on Wednesday with the Jilin City government as a plausible reason for the spike in trading activity.
Under the agreement, SFI Manufacturing will collaborate with the Jilin City government to build an industrial scale pig farm and processing plant.