SG Market (25 Feb 14)

Stocks to watch: *Sembcorp Marine: 4Q13 results beat street estimates. Revenue soared 23% y/y to $1.69b and net profit climbed 9% to $182.4m, boosted by four projects achieving initial recognition milestone and lower than expected tax rate. For the full year, net profit edged up 3% to $555.7m, on the back of a 25% jump in revenue to $5.53b, as the group delivered eight jack ups rigs. Driven by the $4.2b in contract orders secured in 2013, net orderbook now stands at $12.3b, with deliveries stretching into 2019. Final DPS of 6¢ and special DPS of 2¢ proposed, bringing full year payout to 13¢. *First Resources: Posted FY13 underlying net profit of US$217m (+3%), above consensus estimates, on sales of US$626.5m (+4%). The resilient performance was primarily due to higher sales volumes as well as the realisation of some forward sales during the year. EBITDA rose 5% to US$338.9m. During the yr, the group increased its total planted area under mgt by 16.5% to 170.6k ha. FFB pdtn grew 4.5% to 2.3m tonnes, as FFB yield declined to 18.7 tonnes per ha (FY12: 23 tonnes per ha) largely due to biological tree stress and the combined dilutive effective from the newly mature and acquired plantations. The group’s financial position remained healthy with cash of US$272.2m and a low gearing ratio of 0.21x as at end ’13. Final DPS of 3.25¢ takes FY13 payout to 4.5¢ from 4¢. *Vard: 4Q13 revenue grew 23% y/y to NOK3.1b, underpinned by delivery of five vessels during the quarter. Net profit of NOK113m quadrupled y/y and doubled q/q, albeit from their respective low bases, and was below consensus. The improved bottom line was aided by absence of associate losses (NOK100m) from a year ago, and an income tax write back of NOK19m. EBITDA margin halved to 5.1% during the quarter, from 11.4% in 4Q12. The financial performance of the group continued to be negatively impacted by further delays and cost overruns at its Niteroi yard in Brazil. At end 2013, Vard’s order book stood at a record NOK19.4b (+28% y/y), boosted by its strongest full year order intake of NOK14.2b during the year. *Cosco: FY13 results missed as net profit slumped 71% to $30.6m, while revenue slid 6% to $3.5b, mainly due to lower contribution from the ship repair and shipbuilding, which more than offset marine engineering growth. Gross margin sharnk from 13% to 9.2% mainly due to higher inventory write-downs, specifically $8m in 4Q13 (FY13: $23.7m) and a $51m loss provision (FY13: $85.7m). As at Dec, orderbook stood at US$7.8b with progressive deliveries up to 2016. DPS halved to 1¢. *Rex Int’l: 4Q13 net loss widened to US$4.8m from US$0.4m a year ago, mainly from admin fees of US$3.1m, of which US$2m was related to staff, office costs and consultancy fees, while US$1.1m was attributed to the CEO's bonus payment. As the group has not yet commenced production, no revenue has been accounted for 4Q13 and the full year. Group plans to drill four to six offshore wells and up to 10 onshore wells over 2014 and aims to increase its portfolio to 30 licences by end 2014. End Dec NAV was US16.15¢ per share. *Jaya: Proposed to dispose all its subsidiaries for $625m to Mermaid Marine, Australia's largest marine services provider. This translates to a gross implied value of $0.826/share, including Jaya's cash at the end of Dec'13. The subsidiaries make up Jaya's two core businesses, offshore support services and offshore engineering services, and were priced at a 5% discount to book value. Proceeds from the disposal will be distributed to shareholders, after utilizing a portion for its daily expenses till the completion of the disposal, and an incentive bonus to Jaya's executives including its CEO. *CNMC: Phenomenal 4Q13 results despite a 26% y/y fall in average gold price, net profit turnaround to US$1.6m from US$150k loss in 4Q12, with a 76% spike in revenue to US$7.4m, mainly due to the significant increase in the sales volume of fine gold, after production at Sokor mine expanded by 335.6% to 5,813.26oz on the back of new production facilities and higher productivity from the two leaching yards. With the operational leverage, group's all-in cost shrank significantly to US$761/oz, from US$2,502 in 4Q12. CNMC declared final dividend of 0.1¢, bringing FY13 total to 0.2¢. *Rickmers Maritime: Sank into 4Q13 net loss of US$8m vs US$2.2m net profit in previous period. This took FY13 earnings to US$27.6m (-15%). 4Q13 revenue was stable at US$36.4m, while FY13 revenue dipped 1% to US$143.5m due to the reduction in charter rates earned by vessel Kaethe C Rickmers. Bottomline was impacted by impairment charge on vessel and goodwill of US$20.8m. Excluding the impairment loss, profit would have been US$12.7m in 4Q12.7m in 4Q13. Quarterly DPU of US0.6¢ maintained, bringing FY13 payout to US2.4¢. End Dec NAV was US$0.62 per unit. *Wheelock: 4Q13 net loss plunged to $91.3m from $30.8m loss a year ago on revenue of $29m (+3%). This resulted in a 37% drop in FY13 earnings to $40m. Revenue for FY13 fell 44% to $117m as sales of Scotts Square were much lower than the revenue recognized from Orchard View and Scotts Square in FY12. Earnings was impacted by a $94.5m gain on disposal of SC Global’s shares but this was wiped out by a $110m provision set aside for its 99-year Panorama condominium project in Ang Mo Kio. First and final DPS of 6¢ maintained. NAV stood at $2.51. *Yongnam: The Yongnam-led consortium is among four shortlisted bidders which were invited to resubmit tender by 22 Apr, for the design, construction, operation and maintenance of the Hanthawaddy International Airport after talks with previous winner Incheon Int’l Airport Corp broke down. The consortium was named back-up tenderer for the airport in Aug last year. *Linc Energy: Acquiring the entire Underground Coal Gasification (UCG) business and all its coal tenements from Wildhorse Energy for A$4m via issue of new Linc shares. The transaction will add 87.850 acres of coal licences in Hungary to its current resource base. *CNA: Together with Master System Integrator, group has entered into an MOU with Mitsui Knowledge Industry (MKI) to bring in MKI’s IT cloud-based energy management solution “Green energy Management” (GeM2) into S’pore. The system is intended to maintain comfortable indoor environment by directly controlling heating, ventilation and air conditioning of the premise. *Auric Pacific: Expects to report a loss for FY13 due to provisions for impairment of goodwill and fixed assets in its food retail division. *Sino Construction: Expects loss for FY13 due to deteriorating business environment.