STEng – OCBC
10% cap on Ropax contract claims
Receives claim from LDA. ST Engineering (STE) has just updated that its marine arm – ST Marine (STM) – has received a letter of claim (dated 10 Jun 2011) from the lawyers of Louis Dreyfus Armateurs (LDA) in respect of the shipbuilding contract for the Roll-on/Roll-of Passenger (Ropax) ferry that was contracted in Jul 2007 for around S$179m. LDA is claiming for both liquidated and unliquidated damages resulting from STM’s purported breach of the Ropax contract amounting to around S$4.8m and EUR33.03m, respectively. However, STM has referred the matter to its legal advisers and it intends to dispute the claim as it is of the view that LDA’s purported termination of the Ropax contract is a breach and STM itself has terminated the Ropax contract because of this breach.
No material impact on financials. But in the event that STM is liable, we understand that STM is required to refund the milestone payments made by LDA (amounting to S$129m plus interest); STM also maintains that under the contract, its total liability is capped at 10% of the contract price. As such, STE also does not expect the contract termination to have any material impact on its NTA or EPS for FY11. Meanwhile, we note that the milestone payments (excluding interest and damages) are just 2.2% of STE’s FY10 revenue, and we also understand that the group has been making provisions for this particular vessel since missing the stated delivery date.
Sell or lease vessel when completed. We also understand that the group is going ahead with the completion of this vessel; and this will give STE the option of either reselling it in the secondary market or chartering it out to third party operators. However, as the Ropax is likely to be quite highly customized, we note that there may be a need for STE to refit the vessel to new specifications or face a longer time before it can find a suitable buyer or charterer. But from recent transaction reports from shipbrokers, we understand that the demand for RoRo (Roll-on/Roll-off) vessels remains relatively buoyant.
Maintain BUY. As before, we think it is still early days to assess if STE/STM has to pay damages, hence we hold off adjusting our FY11 estimates. Our worst case scenario could see a <5% impact on FY11F pre-tax profit. We are still positive on the group’s overall prospects, defensive nature and do not believe that this incident will affect its strong payout (around 90% of core earnings) ability; hence we maintain our BUY rating and S$3.57 fair value (21x FY11F EPS).
SingTel – BT
SingTel paints a clearer picture of download speeds
Telco will now publish a speed range for its broadband plans
SINGAPORE Telecommunications has set a new precedent by becoming the first local operator to give consumers a clearer indication of the download speeds they can realistically expect when they sign up for a mobile broadband service.
Until now, telcos have been marketing Internet access based on theoretical top speeds that are unattainable outside controlled laboratory conditions.
This practice, coupled with the issue of network congestion that resulted from the explosive growth in mobile broadband usage in recent years, has led a string of complaints from consumers that they are not getting what they are paying for.
Instead of sticking to the prevailing custom, SingTel will now publish a so-called ‘typical speed range’ that customers are likely to experience during their daily use.
This will first be applied to subscribers of its three dedicated mobile broadband plans who are now surfing on the go by connecting a token-like modem to their laptops.
SingTel says those on its 3.6Mbps (megabit per second) service can expect a typical speed range of 0.8 Mbps to 2.1Mbps. Subscribers of its higher-end 7.2 Mbps and 21Mbps plans on the other hand, should mostly expect download speeds of 1.4 Mbps to 3.7Mbps, and 1.7Mbps to 4.8Mbps respectively.
‘We are confident we can deliver this range of speeds 80 per cent of the time,’ said SingTel’s executive vice-president of consumer business Yuen Kuan Moon.
A customer’s mobile surfing speed is affected by a number of factors including the site he is visiting, the hardware specifications of the computer, and the applications that are being used.
Such variables make it difficult for telcos to pinpoint the average download speed for each user with accuracy, he explained.
A speed range offers a more realistic gauge and it is also the easiest way of explaining service quality to customers, Mr Yuen told reporters at a media briefing yesterday.
By becoming more transparent, SingTel is also hoping to convince more customers to opt for its higher- end mobile broadband plans.
Without such clarity, most have now opted for the most basic 3.6Mbps offering as they are worried they may not get more bang for their buck, Mr Yuen said.
As an added incentive, SingTel has also introduced a special ‘priority-pass’ feature to give its 7.2 Mbps and 21 Mbps subscribers dedicated fast lanes so that they can consistently enjoy a speedier and more reliable connection.
Customers who are already subscribing to these two plans will automatically enjoy the new perk at no additional cost.
The monthly subscription fee of SingTel’s three mobile broadband plans will remain unchanged at $29.90, $40, and $59.90.
Earlier this year, the Republic’s telecommunications regulator announced its plan to make it compulsory for telcos to provide consumers with more realistic download speeds.
The Infocomm Development Authority of Singapore has sought public feedback on the parameters for measuring typical Internet speeds and the plan is expected to be ready by early next year.
SingTel – BT
SingTel paints a clearer picture of download speeds
Telco will now publish a speed range for its broadband plans
SINGAPORE Telecommunications has set a new precedent by becoming the first local operator to give consumers a clearer indication of the download speeds they can realistically expect when they sign up for a mobile broadband service.
Until now, telcos have been marketing Internet access based on theoretical top speeds that are unattainable outside controlled laboratory conditions.
This practice, coupled with the issue of network congestion that resulted from the explosive growth in mobile broadband usage in recent years, has led a string of complaints from consumers that they are not getting what they are paying for.
Instead of sticking to the prevailing custom, SingTel will now publish a so-called ‘typical speed range’ that customers are likely to experience during their daily use.
This will first be applied to subscribers of its three dedicated mobile broadband plans who are now surfing on the go by connecting a token-like modem to their laptops.
SingTel says those on its 3.6Mbps (megabit per second) service can expect a typical speed range of 0.8 Mbps to 2.1Mbps. Subscribers of its higher-end 7.2 Mbps and 21Mbps plans on the other hand, should mostly expect download speeds of 1.4 Mbps to 3.7Mbps, and 1.7Mbps to 4.8Mbps respectively.
‘We are confident we can deliver this range of speeds 80 per cent of the time,’ said SingTel’s executive vice-president of consumer business Yuen Kuan Moon.
A customer’s mobile surfing speed is affected by a number of factors including the site he is visiting, the hardware specifications of the computer, and the applications that are being used.
Such variables make it difficult for telcos to pinpoint the average download speed for each user with accuracy, he explained.
A speed range offers a more realistic gauge and it is also the easiest way of explaining service quality to customers, Mr Yuen told reporters at a media briefing yesterday.
By becoming more transparent, SingTel is also hoping to convince more customers to opt for its higher- end mobile broadband plans.
Without such clarity, most have now opted for the most basic 3.6Mbps offering as they are worried they may not get more bang for their buck, Mr Yuen said.
As an added incentive, SingTel has also introduced a special ‘priority-pass’ feature to give its 7.2 Mbps and 21 Mbps subscribers dedicated fast lanes so that they can consistently enjoy a speedier and more reliable connection.
Customers who are already subscribing to these two plans will automatically enjoy the new perk at no additional cost.
The monthly subscription fee of SingTel’s three mobile broadband plans will remain unchanged at $29.90, $40, and $59.90.
Earlier this year, the Republic’s telecommunications regulator announced its plan to make it compulsory for telcos to provide consumers with more realistic download speeds.
The Infocomm Development Authority of Singapore has sought public feedback on the parameters for measuring typical Internet speeds and the plan is expected to be ready by early next year.
Singpost – BT
SingPost raises its stake in Malaysian firm
SINGAPORE Post Limited (SingPost) announced yesterday it has entered into a memorandum of understanding (MOU) with Malaysian company Efficient, and has acquired 50 million ordinary shares in Efficient through a private placement.
Efficient is primarily involved in providing integrated outsourcing solutions in data and document processing, and is listed on the main market of Bursa Malaysia.
The non-binding MOU marked the collaboration between the parties in the setting up of data and document management business operations in Indonesia.
In addition, SingPost and Efficient will jointly identify business opportunities, and may agree to engage in discussions and negotiations with other potential investors and/or business partners related to the collaboration.
SingPost, through its wholly owned subsidiary, Singapore Post Enterprise Private Limited, has also acquired the Efficient shares for an aggregate consideration of RM9.75 million (S$3.97 million).
This will see SingPost’s stake in Efficient rising to 71.24 million shares after the acquisition – up from 21.24 million shares prior to it.
Hence, SingPost now owns 10.06 per cent of the enlarged issued capital of Efficient.
STEng – BT
ST Marine gets letter of claim on Ropax contract
ST Marine intends to dispute Louis Dreyfus Armateurs’ $63.5m claim
ST ENGINEERING’s marine arm ST Marine has received a letter of claim from the lawyers of Louis Dreyfus Armateurs (LDA) for an alleged breach of contract.
In the letter dated June 10, LDA is claiming some $63.5 million – $4.8m for liquidated damages for alleged delivery delay and a sum indicated as about 33.03 million euros ($58.7 million) for unliquidated damages arising from ST Marine’s purported breach of a shipbuilding contract.
‘ST Marine is taking legal advice on the claim and intends to dispute the claim,’ ST Engineering said yesterday.
The bone of contention was a contract for a roll-on/ roll-off passenger ferry (Ropax) worth $179 million (inclusive of variable options) inked in July 2007.
LDA had terminated the contract in March this year, citing a delay in the delivery of the Ropax vessel. It further alleges that even if the vessel is tendered for delivery, there will be deficiency in the deadweight capacity of the Ropax vessel.
The first notice of termination was issued by LDA on March 17. In a second notice of termination on March 24, LDA called on the refund guarantees, which require the milestone payments paid to ST Marine amounting to $129 million plus interest to be refunded.
‘As stated in the previous announcement on 24 March 2011, ST Marine is of the view that LDA’s purported termination of the Ropax contract is a breach and ST Marine itself has terminated the Ropax contract on the basis of LDA’s breach and accordingly has reserved all its rights in the matter,’ ST Engineering said yesterday.
ST Marine also reiterated its position that if liable, its total liability under the terms of the Ropax contract is capped at 10 per cent of the contract price. Hence, no material impact is expected on the consolidated NTA per share and EPS of ST Engineering for the current financial year.