SingPost – BT
SingPost profit slips 9.6% in Q4
SINGAPORE Post (SingPost) saw net profit fall 9.6 per cent year on year to $36.97 million for the fourth quarter ended March 31, 2011, despite a 5.7 per cent rise in revenue to $141.53 million.
Excluding one-off items such as the amortisation of deferred gain on intellectual property rights, benefits from the Jobs Credit scheme and a reversal of impairment charge, underlying net profit was $34.8 million, down 4.6 per cent. Earnings per share for the quarter were 1.924 cents, versus 2.123 cents for the corresponding quarter last year.
Fourth-quarter revenue was bolstered by improved performances from both its mail and logistics business segments.
For the full year, net profit was $160.96 million, down 2.4 per cent, while revenue was up 7.7 per cent to $565.85 million.
SingPost is proposing a final dividend of 2.5 cents, subject to approval at an upcoming annual general meeting, bringing the total dividends for the financial year to 6.25 cents per share.
Ng Hin Lee, chief executive officer (postal and corporate services), said: ‘E-substitution and declining mail volumes continue to affect postal companies. One of our current priorities is to transform our mail business to meet the evolving needs of the market. In the second half of this year, we will roll out a digital mailbox solution to offer options of physical and digital mail.’
‘Over the long term, as letter-mail demand changes, the platform will enable us to retain our relationship with our corporate and walk-in customers as we migrate them to new products and services, which we term post letter-mail products,’ he added.
SingPost, which during the year acquired a 27 per cent stake in Malaysia’s GD Express Carrier, is also seeking acquisition opportunities – especially in the area of logistics – both in Singapore and the Asia Pacific.
Shares in SingPost closed at $1.16 yesterday, up one cent.
SingPost – BT
SingPost profit slips 9.6% in Q4
SINGAPORE Post (SingPost) saw net profit fall 9.6 per cent year on year to $36.97 million for the fourth quarter ended March 31, 2011, despite a 5.7 per cent rise in revenue to $141.53 million.
Excluding one-off items such as the amortisation of deferred gain on intellectual property rights, benefits from the Jobs Credit scheme and a reversal of impairment charge, underlying net profit was $34.8 million, down 4.6 per cent. Earnings per share for the quarter were 1.924 cents, versus 2.123 cents for the corresponding quarter last year.
Fourth-quarter revenue was bolstered by improved performances from both its mail and logistics business segments.
For the full year, net profit was $160.96 million, down 2.4 per cent, while revenue was up 7.7 per cent to $565.85 million.
SingPost is proposing a final dividend of 2.5 cents, subject to approval at an upcoming annual general meeting, bringing the total dividends for the financial year to 6.25 cents per share.
Ng Hin Lee, chief executive officer (postal and corporate services), said: ‘E-substitution and declining mail volumes continue to affect postal companies. One of our current priorities is to transform our mail business to meet the evolving needs of the market. In the second half of this year, we will roll out a digital mailbox solution to offer options of physical and digital mail.’
‘Over the long term, as letter-mail demand changes, the platform will enable us to retain our relationship with our corporate and walk-in customers as we migrate them to new products and services, which we term post letter-mail products,’ he added.
SingPost, which during the year acquired a 27 per cent stake in Malaysia’s GD Express Carrier, is also seeking acquisition opportunities – especially in the area of logistics – both in Singapore and the Asia Pacific.
Shares in SingPost closed at $1.16 yesterday, up one cent.
SMRT – BT
SMRT’s Q4 profit jumps 50% to $34m
For the full year, net profit slips 1.1% to $161.1m
HIGHER operating profit, mainly from improved train and bus ridership, boosted SMRT Corp’s net profit by 50.3 per cent to $34 million for the fourth quarter ended March 31, 2011, although this was partially offset by higher income tax expenses.
Q4 revenue rose 8.6 per cent to $244.5 million from a year ago. Earnings per share rose to 2.2 cents from 1.5 cents previously.
For the full year, the operator of Singapore’s biggest rail network posted a net profit dip of 1.1 per cent to $161.1 million on higher staff and energy costs, as well as other operating expenses. Revenue climbed 8.3 per cent to $969.7 million, mainly on higher train and bus ridership, contribution from the Circle Line, higher taxi rental revenue and higher rental and advertising revenue. These were, however, partially offset by lower average MRT fare and lower revenue from Palm Jumeirah. Earnings per share for the full year slipped to 10.6 cents from 10.7 cents a year ago.
A final dividend of 6.75 cents per share has been proposed, taking the total dividend for FY2011 to 8.5 cents per share, or $129.1 million.
‘SMRT has achieved a commendable set of results despite challenges faced during the year such as losses from the start-up phase of Circle Line stages 1 to 3 and the volatility in energy prices,’ said SMRT president and chief executive officer Saw Phaik Hwa.
Revenue from its core rail business rose 9.6 per cent to $527.1 million for FY2011 due mainly to higher ridership even as this was offset by lower average train fare due to the implementation of distance-based fares. The opening of CCL 1 and 2 also boosted revenue. But full-year operating profit was $16.2 million lower at $113.5 million on lower other operating income, higher energy costs and staff and related expenses.
SMRT also runs a fleet of buses and full-year revenue from the operations increased 6.7 per cent to $213.1 million on higher ridership partially offset by lower average fare. Full-year bus operations incurred a higher operating loss of $3.1 million for FY2011 on higher staff expenses because of lower jobs credit, along with higher diesel cost.
Rental revenue from its taxi fleet grew 4.3 per cent to $74.1 million with improved hired-out rates and a larger average hired-out fleet. Still, taxi operations saw a $2.6 million loss against an operating profit of $1.8 million the year earlier due to higher depreciation, higher insurance cost, and higher repair and maintenance costs.
Both rental revenue from commercial space and advertising revenue rose though. The former grew 13.1 per cent to $73.6 million following the redevelopment of various MRT stations, boosting operating profit by $6.1 million compared with the previous year. The latter was 12.6 per cent higher at $25.4 million on an increase in advertising on trains and in MRT stations, resulting in 14.6 per cent higher operating profit.
Looking ahead, SMRT expects higher revenue mainly due to higher train and bus ridership in the first quarter. Group operating expenses are likely to be higher as staff and related costs rise with higher CPF rates and additional headcount with the ramp-up of CCL 4 and 5, the final two Circle Line stages due to open in October.
April 2011
Results Announcement
- 13 Apr 11 : SPH (Q211) – EPS 5ct (todate 12ct) ; DPS 7ct
- 15 Apr 11 : M1 (Q111) – EPS 4.7ct
- 29 Apr 11 : SMRT (Q411) – EPS 2.2ct (todate 10.6ct) ; DPS 6.75ct (todate 8.5ct)
- 29 Apr 11 : SingPost (Q411) – EPS 1.924ct (todate 8.369ct) ; DPS 2.5ct (todate 6.25ct)
- 4 May 11 : StarHub (Q111)
- 11 May 11 : MIIF (Q111)
- 11 May 11 – STEng (Q111)
- 12 May 11 (AM) – SingTel (Q411)
- 12 May 11 : SBSTransit (Q111)
- 13 May 11 : ComfortDelgro (Q111)
STI = 3179.86 (-6.13)
|
Stock |
Period |
EPS cts |
DPS cts |
Mkt |
Yield |
PE |
Div Breakdown |
|
SPH |
FY10 (Aug) |
31 |
27 |
$3.98 |
6.784% |
12.84 |
Interim 7ct ; Final 9ct + 11ct (Special) |
|
SingPost |
FY11 (Mar) |
8.369 |
6.25 |
$1.16 |
5.388% |
13.86 |
Q1, Q2, Q3 1.25ct ; Q4 2.5ct |
|
STI ETF |
Dec-10 |
— |
3.5 |
$3.23 |
2.167% |
— |
Dec10 3.5ct ; Jun10 3ct |
|
SATS |
FY10 (Mar) |
16.7 |
13 |
$2.58 |
5.039% |
15.45 |
Final 8ct ; Interim 5ct |
|
ST Engg |
FY10 (Dec) |
16.21 |
14.55 |
$3.15 |
4.619% |
19.43 |
Final 4ct + 7.55ct (Special) ; Interim 3ct |
Transport
|
Stock |
Period |
EPS cts |
DPS cts |
Mkt |
Yield |
PE |
Div Breakdown |
|
SBSTransit |
FY10 (Dec) |
17.63 |
8.80 |
$1.94 |
4.536% |
11.00 |
Interim 4.5ct ; Final 4.3ct |
|
ComfortDelGro |
FY10 (Dec) |
10.95 |
5.50 |
$1.53 |
3.595% |
13.97 |
Interim 2.7ct ; Final 2.8ct |
|
SMRT |
FY11 (Mar) |
10.6 |
8.5 |
$1.90 |
4.474% |
17.92 |
Interim 1.75ct ; Final 6.75ct |
TELCO
|
Stock |
Period |
EPS cts |
DPS cts |
Mkt |
Yield |
PE |
Div Breakdown |
|
SingTel |
FY10 (Mar) |
24.55 |
14.2 |
$3.12 |
4.551% |
12.71 |
Interim 6.2ct ; Final 8ct |
|
M1 |
FY10 (Dec) |
17.5 |
17.5 |
$2.39 |
7.322% |
13.66 |
Interim 6.3ct ; Final 7.7ct + Special 3.5ct |
|
StarHub |
FY10 (Dec) |
15.34 |
20 |
$2.87 |
6.969% |
18.71 |
Q1 5ct ; Q2 5ct ; Q3 5ct ; Q4 5ct |
Funds / Infrastructure
|
Stock |
Period |
DPS cts |
Mkt |
Yield |
NAV |
Div Breakdown |
|
SPAus |
2H10 (Mar-10) |
A4.0 (Gross) |
$1.170 |
9.151% |
A$0.91 |
2H10 A4.0ct ; 1H10 A4.0ct |
|
MIIF |
2H – Dec10 |
1.50 |
$0.580 |
5.172% |
$0.83 |
2H10 1.5ct ; 1H10 1.5ct |
* SPAus DPU in A$. Yield is Calculated Using Latest Exchange Rate (1.3383) fm Yahoo
NOTES :
- Mkt Price is as on 29-Apr-11
- SingPost : Q411 (Mar11) – 2.5ct ; Q311 (Dec10) – 1.25ct ; Q211 (Sep10) – 1.25ct ; Q111 (Jun10) – 1.25ct
- SMRT : Q411 (Mar) – Final 6.75ct ; Q211 (Sep10) – Interim 1.75ct
- SPH : 1H11 (Feb) – 7ct
- MIIF : 2H10 (Dec) – 1.5ct ; 1H10 (Jun) – 1.5ct
- ST Engg : 2H10 (Dec) – 4ct (Final) + 7.55ct (Special) ; 1H10 (Jun) – 3ct
- ComfortDelgro : Q410 (Dec) – 2.8ct ; Q210 (Jun) – 2.7ct
- SBSTransit : Q410 (Dec) – 4.3ct ; Q210 (Jun) – 4.5ct
- StarHub : FY11 Div Guidance – 5ct/Q
- StarHub : Q410 (Dec) – 5ct ; Q310 (Sep) – 5ct ; Q210 (Jun) – 5ct ; Q110 (Mar) – 5ct
- M1 : 2H10 (Dec) – Final 7.7ct + Special 3.5ct ; 1H10 (Jun) – Interim 6.3ct
- SingTel : 1H11 (Sep10) – Interim 6.8ct
- SPAus : 1H11 (Sep10) – A4ct (before tax) / A3.7772ct (after tax) ; 2H10 (Mar10) – A4ct (before tax) / A3.7739ct (after tax)
- SATSvcs : Q211 (Sep10) – Interim 5ct
ComfortDelgro – Phillip
Ridership update
•Rail & Bus ridership up 16.8% & 7.6% in 1QFY11
•Increasing cost of private car ownership to encourage the use of public transport
•Singapore’s listco <20% of ComfortDelGro’s (CDG) value
•Maintain Buy with target price of S$2.01
Ridership growth continues in Singapore’s Rail & Bus business
SBST’s rail ridership grew by 16.8% y-y to 42.5mn passengers, while bus ridership grew by 7.6% to 223.2mn passengers for 1QFY11. We believe that the North-East Line (NEL) will continue to record strong ridership due to the continued residential developments in the North-Eastern corridor. While we opine that SBST’s bus business faces long term challenges from Singapore’s growth in rail network, near term incentives to switch to public modes of transportation continue to aid its short term growth.
Disincentive for private mode of transport
We believe that the strong growth in both rail and bus ridership is a reflection of a structural shift in commuter’s choice from private to public modes of transport. Over the past 3 years, public transport fares remain largely unchanged, while the cost of private car ownership surged significantly by >20%. This is led by surging pump prices, as well as soaring COE prices. We opine that the cost of private car ownership will continue to stay high and result in significant switch from private to public transport.
Singapore is just one part of the Business
CDG offers a unique exposure to the global land transport business. CDG’s stake in SBST & VICOM, which gives the Group exposure to Singapore’s rail, bus and vehicle inspection & testing business, makes up <20% of the value in CDG. The remaining c.80% CDG comprise mainly of a growing global business. We attempt to account for the value in CDG by stripping out the value of two of its listed subsidiaries (list-co), SBST and VICOM, which CDG holds a 75% and 69% stake respectively. Despite a strong share price performance in the stock of VCM (+47%) and SBST (+13%) since the start of 2010, the stock price of CDG declined by 6% over the same period.
CDG ex-listco trades within a very tight P/E range
We examined the P/E valuation of CDG ex-listco over the past 5yrs and observed a very tight +/- 1 S.D. range of 16.3X-19.7X. If history is a good guide to the stock’s future performance, these mean reversion behaviour of the stock offers a range trading opportunity for investors. CDG ex-listco only twice traded significantly out of this range in the past 5 years: on the downside during the GFC (Oct-Dec08) and on the upside during the previous market peak (Apr-Aug07). Hence, we believe current valuation of 16.9X presents a good buying opportunity on CDG.
The Global expansion continues
CDG recently announced plans to set up its 3rd driving school, Chongqing Liangjiang ComfortDelGro Driver Training Co. Ltd, in China with an investment of RMB165mn (S$31.2mn). The new driving centre is expected to house 120 vehicles and has an initial capacity of 700students per month. The two existing driving centres, Chengdu ComfortDelGro Qing Yang Driving School and Chongqing ComfortDelGro Driving Training Co. Ltd, enrolled 4,200 and 9,660 students in 2010 respectively. At full capacity, we estimate that this new driving centre would contribute c.RMB12mn of revenue per year.
Valuation. We used a blended valuation model of DCF (COE: 8.2%, terminal g: 1%) and P/E (17X FY11e PATMI) to arrive at our target price of S$2.01. We kept our earnings estimates unchanged pending the release of 1QFY11 results on 13th May. With an upside of 30.8% to the last trading price, we maintain our Buy call on CDG.