Warrants Highlight

Ezra declines on lower net profits

Before the Singapore market started its trading session yesterday, Ezra announced its first quarter earnings. It reported 1Q revenue of US$278.7million and gross profit of US$49.9 million, which were a 54% and a 44% jump respectively as compared to the same period a year ago. Despite this, the profit attributable to shareholders fell 49% and the counter slumped 4.2% for the day.

Macquarie’s Ezra warrants

According to the press statement released by the company, higher personnel costs incurred resulted in the disappointing net attributable profit. Managing Director, Mr Lionel Lee, said that while the company “continues to build its subsea tendering, engineering and execution team in anticipation of new vessels and projects, it has led to the current disproportionate general and administrative expenses relative to revenue”. However, he is not worried about it as he expects the infrastructure built will be beneficial in the long run and “will be sufficient to support the company for years to come”.

EMAS AMC, a bright spot
Overall, Mr Lee is pleased with the progress of EMAS AMC, an entity created after the acquisition of Aker Marine Contractors AS. He says that the “progress is driven by subsea projects from Ezra’s growing orderbook”. With EMAS AMC continuing to “build up its capabilities and the delivery of major subsea vessels”, it will “open up new and exciting opportunities, but also place Ezra in a solid position to ride the strong wave of global subsea activity”.

For 1Q2013, the subsea activity at EMAS AMC contributed US$86.2 million to the US$98.2 million increase in the Group’s sales.

Offshore support services to gradually recover
Looking ahead, Mr Lee expects a gradual recovery in the offshore support services sector and thus, Ezra will “focus on improving operational efficiency and its continued ability to deliver a growing orderbook position” will enable the Group to “well reap the benefits through the rest of FY2013”.

Wins contracts worth more than US$160 million
Along with its results, Ezra declared that its subsea services, offshore support services and energy services divisions have been awarded multiple contracts for projects in the North Sea and Asia Pacific. The value of the contracts won total more than US$160 million.

Mr Lee is delighted with the win and said that “these project awards demonstrate the company’s sustained commitment to the North Sea and Asia Pacific markets. They serve as a vote of confidence…and the consistent performance of their business will enable them to continue to deliver success in their internationalisation strategy”.

Singapore Market Wrap

Property and banking counters dragged down market

The STI slipped 0.3% to 3,206.6 day-on-day, attributed to a drop in property and bank stocks. CapitaLand plunged more than 4.0% while City Development and Keppel Land each dived more than 7.0%. The three local bank stocks were also hit due to tighter housing loan regulation with each counter falling between 1.3 to 2.3%.

Call STI 3250MBeCW130430 (R5XW) exercise level 3,250.*
Put STI 3100MBePW130430 (R5WW) exercise level 3,100.*

GLP pre-leased to Deppon Logistics
GLP further enhanced its relationship with Deppon Logistics when it pre-leased roughly 77 thousand square metres to Deppon Logistics in China. This made Deppon Logistics, a leading third-party logistics provider in China, the second largest client of GLP. GLP slipped 1.5% to $2.70 for the day.

Call GLP MB eCW130603 (Q8UW) exercise price $2.90.*

Property counters stumbled on government measures
CapitaLand plunged to an intraday low of $3.65 before eventually closing down 4.1% to $3.73 on Monday. This slide came after the Government announcement of the latest cooling measures on Friday night. This is the seventh round of cooling measures announced since 2009.

Call CapitalaMBeCW130704 (R5YW) exercise price $4.00.*
Put CapitalaMBePW130903 (R5TW) exercise price $3.50.*

Overnight Market Wrap

Apple leads S&P lower

The S&P slipped less than 0.1% day on day to close at 1470.68 last night. Apple was the biggest drag on the index, falling 3.6% and leading the technology shares down 0.7% as a group.

The slump in Apple came after the Nikkei newswire reported that the company scaled back production plans for the iPhone because sales were lower than expected. However, not all technology companies did badly. Technology giants Dell and Hewlett-Packard rallied 13% and 4.9% respectively. Dell added gains at the back of privatisation rumours while HP retook the spot as the top personal computer maker.

After the US trading session, Fed's chairman Ben Bernanke said that he is not aware of any new stimulus plans that the central bank can use to boost growth.

Overnight Markets

Indices	Last	Change
STI	3206.59	-0.3%
HSI	23413.30	0.6%
DJIA	13507.30	0.1%
S&P 500	1470.68	-0.1%
Nasdaq	3050.39	-
China A50	8494.19	3.9%

Corporate News

Corporate Announcements

GLP announced the pre-lease of roughly 77,000 square metres in China to Deppon Logistics, a leading third-party logistics provider in China.

Earnings release dates:
Tue 15 Jan: AREIT (3Q13)
Fri 18 Jan: CapitaMall Trust (FY12)
Tue 22 Jan: MapleTree Industrial Trust (3Q13)
Tue 22 Jan: SGX (2Q13)
Wed 23 Jan: Keppel Land (FY12)
Wed 23 Jan: CapitaCommercial Trust (FY12)
Thurs 24 Jan: Keppel Corp (FY12)
Wed 30 Jan: SATS (3Q13)
Wed 6 Feb: DBS (FY12)
Wed 6 Feb: GLP (3Q13)
Wed 27 Feb: UOB (FY12)
Thurs 28 Feb: Noble (FY12)