TODAY'S HEADLINE  


SIA SPRINGS SURPRISE 73% JUMP IN Q1 PROFIT  
Passenger carriage, fuel price among boosting factors  


Singapore Airlines has developed a habit of confounding the sceptics, and it did so again with its 'rst'quarter results. While most analysts were expecting a slight rise in earnings to around $50 million, the airline unveiled a strong 73 per cent surge in April'June 2012 net pro't to $78 million, from $44.7 million last year, thanks to higher passenger carriage, a moderation in fuel'price increases and a bounce o'  a lower base from last year following Japan's earthquake'tsunami.

Revenue for the period was up 6 per cent at $3.78 billion, boosted by a 9.6 per cent improvement in passenger carriage. This tra'c growth was driven by promotions undertaken to boost loads amid intense competition and weak business sentiment. As a result, yields declined 3 per cent from the same period in the previous 'nancial year.

Although jet fuel prices retreated, fuel cost before hedging was 2 per cent higher year'on'year, caused largely by increased fuel uplift  driven by the 4.3 per cent capacity growth. Higher sta'  costs were mainly due to increased activities, and wage adjustments following the conclusion of collective agreements with the unions. In terms of breakdown of the main units within the group, the parent company's Q1 operating pro't turned around sharply to a pro't of $85 million from 2011's $36 million loss.

The airline's revenue rose 7 per cent versus a 3 per cent rise in expenditure on the back of a 9.6 per cent increase in passenger carriage. This was partially o'set by the 3 per cent slide in yields. Average jet fuel prices for the quarter remained high at above US$130 per barrel despite the recent correction, though other cost items were contained by continued e'orts to maintain strict cost discipline.

SIA Engineering's operating pro't of $34 million was 'at ($35 million last year), while SilkAir's operating pro't of $18 million was down from the $21 million it posted during the April'June 2011 period.


NEWS BUZZ

Jardine Cycle & Carriage (S$45.60) 
Reaps US$56m gain from divestment
Jardine Cycle & Carriage has disposed its entire interest in a company. Of the US$135mil cash consideration, Jardine C&C expects to recognise a net gain of US$56mil for the 'nancial year ending Dec 31, 2012. Proceeds from the disposal will be used to reduce borrowings and for general working capital.


Cache Logistics Trust (S$1.11) 
Q2 DPU falls 5% to 1.98 cents
Cache Logistics Trust posted a DPU of 1.98 cents for the 2Q ended June 30, down 5%, due to an enlarged share base after a private placement of 60mil new shares on March 30, the Reit said. Gross revenue for the quarter was up 8.5% at $17.6mil from a year ago. Net property income rose 8.1% to $16.7mil and distributable income climbed 4.5% to $13.9mil.

The Reit's NAV was 92 cents as at June 30, down from 93 cents at the end of last year. The Reit's por''olio now consists of 12 logistics warehouses in Singapore and China worth $944.3 million.

Frasers Commercial Trust (S$1.075) 
Q3 DPU rises 23%  
Frasers Commercial Trust (FCOT) posted a 25.8% jump in its distributable income to $11mil for the 3Q ended June. DPU increased 23.2% to 1.70 cents per unit. There is no distribution payment this quarter as FCOT distributes semi'annually. For the quarter, gross revenue recorded a 17% year'on'year increase to $35.7mil. Net property income (NPI) rose 7.1% to $26.6mil a year ago. The growth was mainly attributable to higher income received from the Caroline Chisholm Centre and higher revenue from direct leases with underlying tenants as a result of the expiry of the master lease at China Square Central.

SATS (S$2.81) 
Q1 earnings dip on labour, material costs  
Rising labour and material costs weighed heavily on SATS Ltd's 1Q pro't, with the ground'handling giant posting a 2.8% slide to $41.3mil in earnings attributable to shareholders. Revenue was up 13.6% at $437.9mil over the same quarter a year earlier, thanks to contributions from both Gateway Services (up $11.6mil or 8.1%) and Food Solutions (up $40.7mil or 16.9%). The results were impacted by the absence of some $2.8mil following the sale of UK'based food business Daniels Group, and comparison against last year's one'o' writeback of $5.5mil (net of tax and non'controlling interest) at its Japan'based TFK Corporation's retirement bene't plan.
SATS' balance sheet showed equity attributable to owners standing at $1.55bil, while total assets increased to $2.19bil, with cash and cash equivalents rising from $470.1mil to $532.2mil. Free cash 'ow generated during 1Q13 was $53mil and debt'to'equity ratio 0.11 times.

Source: The Business Times

Source: AmFraser