iPhone could ring up profits for M1
Keppel Land’s head honcho Kevin Wong has a good reason to smile. Not only did Keppel Land report a strong set of figures for that period, it exceeded most analysts’ expectations.
Revenue for the company increased by 22.6% year on year to S$227.8 million and this was largely from property trading which was driven by progressive revenue recognition from The Sixth Avenue Residence. Carey Wong, an analyst from OCBC reckons that the recent property surge could be behind the company’s better that expected results. “As the high-end property segment picked up, KepLand sold about 190 units in 3Q09. Two new high-end projects were launched in 3Q09 and selling prices had also exceeded our earlier expectations, he said.”
But it was not just sales in the local market that attributed to Keppel’s $227.8 million profit. Overseas property also played a major part. In which countries did Keppel reel in the property sales?
Property sales in countries like Vietnam, Indonesia and India had picked up strongly in 3Q09, but the real star performer was China, property where Keppel Land sold about nine hundred units in the third quarter alone.
And a pleasant surprise for Keppel Land was the pre-leasing of office spaces at Marina Bay Financial Centre and Ocean Financial Centre which made inroads in third quarter despite the challenging conditions of the office rental markets.
At the Marina Bay Financial Centre, 22,000 sq ft of office space had been pre-committed by Servcorp and this brings the pre-commitment rate for the building for phase 1 marginally higher to 67%. At Ocean Financial Centre, 50,000 sq ft out of the total net lettable area of 850,000 sq ft had been pre-leased.
Smartphone a smart move.
They should make an iPhone application that can read emotions so that we can find out how MobileOne’s (M1) new CEO Karen Kooi is feeling. M1 recently reported its 3Q09 results last Friday, with revenue down 4.2% compared to last year and 1.1% from the last quarter to S$188.4, as the Telco still continues to feel the impact of the economic slowdown.
For the first nine months this year, revenue for M1 fell 6.7% to S$565.3m, meeting around 72.6% of analysts from OCBC’s financial 2009 estimate.
There are however mixed operating statistics for M1 notes OCBC Investment research team.
“On the business front, M1 continues to regain lost ground with slightly more aggressive promotions in both the pre- and post-paid segments; overall subscribers rose by 49,000, adding to the 50,000 gain in 2Q09, led by a 41,000 jump in pre-paid customers.
On the postpaid front, despite adding another 7,000 users, its market share continued to slip, easing to 26.0% from 26.5% in the second quarter of 2009 and 26.8% in the first quarter of 2009; this as monthly churn rebounded to 1.7% from 1.5% in 2Q09 and 1.6% in 1Q09.”
But the recent deal to distribute the Apple iPhone 3GS by the end of the year, might just turn the tide for M1.
With the popular gadget, the company should be able to reduce its churn as well as arrest the slide in post-paid average revenue per user as smartphone users tend to subscribe to the higher price plans.
A 12,000 ha umbrella please
Straits Asia Resources (SAR) Chairman Milan Jerkovic must have wished he had an 12,000 ha sized umbrella to protect his Indonesian mine.
Due to continuous rain the company has to deal with a setback at its Jembayan mine -which covers 12,000 hectares in East Kalimantan, Indonesia.
The loading facilities of the mine were just commissioned this year, have been damaged by heavy rainfall which led to a failure of its foundation structure.
And although the extent and impact of the damage have yet to be ascertained, the Straits Asia Resources has warned that no further loading will be possible from this facility for at least some time.
OCBC’s Investment Research analyst Lee Wen Ching expects production volume to be hurt as a consequence. “The group had originally planned to raise Jembayan’s output from 5.5 million tons (mt) in 2008 to seven million tons in 2009 with the help of the enhanced capacity. With the destruction of its new facility, we have cut our projections to 5.8 mt,” he said.
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