Author: kktan
SingPost – DBSV
Regionalization on full drive
At a Glance
• 1Q12’s underlying net profit of S$37.3m (+0.3% YoY) and interim DPS of 1.25 Scts were inline.
• Invested c.S$65m in regional acquisitions since Jan, which should more than offset the potential decline in the mail segment in the long run
• Maintain HOLD with TP of S$1.17
Comment on Results
Net underlying profit of S$37.3m was inline with our expectations. Proposed interim DPS of 1.25 Scts as expected. Group revenue was up 2.9% yoy, mainly driven by 11% growth in logistics revenue, while mail and retail segments grew by 1.6% and 1.7% respectively. However, management highlighted that mail segment has begun to face increased pressure from e-substitution recently. Operating expenses grew by a faster 7% yoy due to 12% yoy increase in labour costs but partly offset by stable depreciation & amortization expenses.
Acquiring e-commerce, e-substitution & logistics companies. Out of S$200m raised through a bond issue in March 2010, SingPost has used S$65m to acquire stakes in six regional companies. Contribution from these acquisitions is estimated to be S$2-3m in FY12F and should grow further. This may help to buffer the potential decline in the mail segment as revenue and margins come under pressure. We would like to highlight that acquired business have lower operating margins but should help to enhance Singpost’s earnings in the long run. With the remaining invested in cash and high-yield financial instruments, Singpost has the financial muscle to acquire companies. We also expect a one-time capex of S$50m-70m for the replacement or upgrade of its mail-sorting machine. The timing is not certain, as there is a possibility that it may be delayed from 2013/14.
Maintain HOLD. Our TP of S$1.17 is based on DDM (cost of equity 7.7%, growth rate 2%). We have assumed that dividends can grow by 2% p.a. in the long term.
SATS – BT
Family could be why SATS CEO quit
Clement Woon desires to be closer to family
Clement Woon’s decision to resign as the CEO of SATS could have been largely due to his desire to be closer to his family.
While Mr Woon did not elaborate or directly address the reasons for his sudden resignation last Friday, when asked by shareholders at the company’s AGM yesterday, he alluded to the fact that he had spend too much time away from his family who are living in Switzerland.
Mr Woon’s resignation, coming just four years after he took over at the helm of the airport ground services company, then expanded and diversified its business quickly, shocked many market insiders, coming as it did at a critical time for SATS. Besides facing a significant cost crunch which is shaving its profit margins, the company will soon be facing off against a new competition on its home ground with the impending arrival of a third ground services operator, American ground services giant Aircraft Service International Group.
Mr Woon joined SATS in November 2007, after 10 years in Switzerland with spatial surveying company Leica Geosystems.
At the time, he said that part of his reason for returning to Singapore was to be with his son, who was due to serve national service. He would have completed NS by now.
He and his wife, a homemaker, also have three daughters aged 18, 16 and 11. The plan was for the family to reunite when the children finish their schooling. Mr Woon has said before that leaving them behind in Kanton St Gallen – a village in Heerbrugg, Switzerland – had been very tough.
Addressing shareholders yesterday, SATS chairman Edmund Cheng said that the company had put out a global search for a new CEO, and assured them that the search would cover both external and internal candidates.
SATS’ foods business veteran Tan Chuan Lye has been appointed the interim CEO.
On Tuesday, SATS disappointed with a lower-than-expected first-quarter profit of $42.5 million, 4 per cent down from the previous year. This would have been even lower at $37 million if not for a $10.1 million writeback for lower pension obligations for its Japan based unit, TFK.
Analysts are cautious about the outlook for the company. Kim Eng maintained a ‘hold’ with a reduced target price of $2.46.
SATS – BT
Family could be why SATS CEO quit
Clement Woon desires to be closer to family
Clement Woon’s decision to resign as the CEO of SATS could have been largely due to his desire to be closer to his family.
While Mr Woon did not elaborate or directly address the reasons for his sudden resignation last Friday, when asked by shareholders at the company’s AGM yesterday, he alluded to the fact that he had spend too much time away from his family who are living in Switzerland.
Mr Woon’s resignation, coming just four years after he took over at the helm of the airport ground services company, then expanded and diversified its business quickly, shocked many market insiders, coming as it did at a critical time for SATS. Besides facing a significant cost crunch which is shaving its profit margins, the company will soon be facing off against a new competition on its home ground with the impending arrival of a third ground services operator, American ground services giant Aircraft Service International Group.
Mr Woon joined SATS in November 2007, after 10 years in Switzerland with spatial surveying company Leica Geosystems.
At the time, he said that part of his reason for returning to Singapore was to be with his son, who was due to serve national service. He would have completed NS by now.
He and his wife, a homemaker, also have three daughters aged 18, 16 and 11. The plan was for the family to reunite when the children finish their schooling. Mr Woon has said before that leaving them behind in Kanton St Gallen – a village in Heerbrugg, Switzerland – had been very tough.
Addressing shareholders yesterday, SATS chairman Edmund Cheng said that the company had put out a global search for a new CEO, and assured them that the search would cover both external and internal candidates.
SATS’ foods business veteran Tan Chuan Lye has been appointed the interim CEO.
On Tuesday, SATS disappointed with a lower-than-expected first-quarter profit of $42.5 million, 4 per cent down from the previous year. This would have been even lower at $37 million if not for a $10.1 million writeback for lower pension obligations for its Japan based unit, TFK.
Analysts are cautious about the outlook for the company. Kim Eng maintained a ‘hold’ with a reduced target price of $2.46.
SingPost – BT
SingPost Q1 profit dips 3.5% to $39.24m
Revenue goes up 3% to $142.3m for the quarter
SINGAPORE Post (SingPost) saw net profit dip 3.5 per cent to $39.24 million while revenue climbed 3 per cent to $142.3 million for the first quarter ended June 30, 2011.
Underlying net profit – which excludes one-off items – was flat at $37.37 million. Earnings per share for the quarter were 2.042 cents, compared to 2.111 cents in the corresponding quarter a year ago.
Contributions from its various business segments were mostly higher with revenue from its mail segment increasing 1.6 per cent to $97.24 million.
Logistics revenue, which grew the strongest, was up 10.7 per cent to $51.24 million. Retail revenue increased 1.5 per cent to $16.56 million due to higher retail product contributions, which offset the decline in financial services revenue after the sale of its SpeedCash business in March this year.
Rental and property-related income rose 5.1 per cent to $10.6 million while miscellaneous income increased 7.9 per cent to $4.5 million.
Meanwhile, total expenses for the group were up 6 per cent to $109.3 million. However, net cash from operating activities also came in higher at $37.7 million in Q1 FY11/12, compared to $29.1 million in the corresponding quarter last year.
The board has declared an interim quarterly dividend of 1.25 cents per ordinary share, payable on Aug 31.
‘The group continues to face formidable challenges in the postal industry arising from e-substitution, competition and rising operating costs and is accelerating efforts to diversify and grow its businesses,’ SingPost said. ‘Besides driving organic growth in Singapore and in the regional markets through Quantium Solutions, the group will continue pursuing acquisition opportunities in the Asia-Pacific region.’
Shares in SingPost closed at $1.10 yesterday, unchanged.
SingPost – BT
SingPost Q1 profit dips 3.5% to $39.24m
Revenue goes up 3% to $142.3m for the quarter
SINGAPORE Post (SingPost) saw net profit dip 3.5 per cent to $39.24 million while revenue climbed 3 per cent to $142.3 million for the first quarter ended June 30, 2011.
Underlying net profit – which excludes one-off items – was flat at $37.37 million. Earnings per share for the quarter were 2.042 cents, compared to 2.111 cents in the corresponding quarter a year ago.
Contributions from its various business segments were mostly higher with revenue from its mail segment increasing 1.6 per cent to $97.24 million.
Logistics revenue, which grew the strongest, was up 10.7 per cent to $51.24 million. Retail revenue increased 1.5 per cent to $16.56 million due to higher retail product contributions, which offset the decline in financial services revenue after the sale of its SpeedCash business in March this year.
Rental and property-related income rose 5.1 per cent to $10.6 million while miscellaneous income increased 7.9 per cent to $4.5 million.
Meanwhile, total expenses for the group were up 6 per cent to $109.3 million. However, net cash from operating activities also came in higher at $37.7 million in Q1 FY11/12, compared to $29.1 million in the corresponding quarter last year.
The board has declared an interim quarterly dividend of 1.25 cents per ordinary share, payable on Aug 31.
‘The group continues to face formidable challenges in the postal industry arising from e-substitution, competition and rising operating costs and is accelerating efforts to diversify and grow its businesses,’ SingPost said. ‘Besides driving organic growth in Singapore and in the regional markets through Quantium Solutions, the group will continue pursuing acquisition opportunities in the Asia-Pacific region.’
Shares in SingPost closed at $1.10 yesterday, unchanged.