Source : The Business Times, May 5, 2008
Smaller firms also gained from boom in construction, oil & gas industries
SHIPBUILDERS, property trusts and companies related to the construction and oil and gas industries mostly reported strong earnings growth in the first three months of the year, boosted by strong demand and high property prices.
Among the firms that saw the biggest percentage jump in earnings were Singapore-listed Chinese marine groups Cosco Corp and Yangzijiang Shipbuilding. Both saw their net profit double from a year earlier, buoyed by strong demand for shipbuilding, shiprepair and marine engineering services.
Smaller firms also benefited from the boom in the construction and oil and gas industries.
Beng Kuang Marine, which provides engineering services and equipment to firms in the marine, offshore oil and gas, and construction industries, reported a doubling in net profit for the quarter to $2.35 million, from $1.18 million a year earlier.
And BH Global Marine, which supplies electrical cables and lamps to shipyard operators and ship owners, said its net profit rose 24 per cent to $5 million in the first quarter.
The construction and marine engineering sectors here are likely to stay robust despite the impact of a slowing US economy, said Prime Minister Lee Hsien Loong last Thursday in his May Day rally speech to workers.
Among the construction sector-related firms, cement-maker Jurong Cement saw its first-quarter net profit jump to $1.08 million, from $169,000 a year earlier. Although revenue fell, its gross profit margin improved mainly due to lower raw material costs compared with a year earlier, when material prices rose sharply as a result of the Indonesian ban on sand exports.
But AusGroup, which provides engineering services to oil and gas and mining-related firms, stunned investors when it issued a profit warning on April 25, saying that it would report a loss for its third quarter to end-March. The unexpected loss is due to a provision made 'arising from uncertainties around the interpretation of the terms of a major contract being performed by a subsidiary in Australia', the firm said.
In an update three days later, AusGroup said that it expects to release its results by May 15, and that the loss would not exceed A$4 million (S$5 million).
Property trusts that had reported their earnings for the three months to end-March by Friday night all did well. Excluding Ascendas India Trust, which listed only last August, all 13 real estate investment trusts (Reits) which had comparable periods a year earlier said that net profit rose.
Among them, K-Reit Asia saw the largest percentage jump in net profit. Its distributable income of $11.4 million for the quarter was almost three times the $4.3 million that it earned a year earlier. This was mainly due to a $10.9 million income contribution from its one-third interest in One Raffles Quay.
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