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Singapore stock market and companies daily report (China XLX, Neptune Orient Lines, Yangzijiang) (February 25, 2013)

Contributed by Shares Investment

Improved Profitability Sends China XLX’s FY12 Earnings Surging 72.4%
Lower coal prices helped China XLX Fertiliser to record a 72.4 percent year-on-year jump to Rmb311.1 million in earnings for the full-year ended 31 December 2012. The lower cost of sales led to an improvement of 4.5 percentage points in gross margin to 18.2 percent. Top line rose 7 percent to Rmb3.9 billion. The company attributed the growth to an increase in urea and compound fertiliser average selling prices and higher methanol and compound fertiliser sales volume. Sales of urea continued to account for bulk of total revenue, standing at 63.3 percent. For the fourth quarter, earnings increased 8.8 percent to Rmb30.5 million in tandem with revenue growth of 8.3 percent. A dividend per share of Rmb0.063 was declared.
Significance: China XLX sees the material changes in the urea export tax policy made by the Chinese government to bring the base rate for urea in the low-tax window down and reduce the tax rate for high season as beneficial to the company’s business. This will help support its operation despite the industry expecting to see further consolidation this year.

NOL Opens Lower After Slumping Into Red
Global container shipping and logistics company Neptune Orient Lines started today’s trading session at $1.21, lower by $0.015 or 1.2 percent from Friday’s closing price of $1.225. This came after the company released its fourth quarter results which showed that NOL was unable to stay on the profitability track seen in the third quarter. However, the company’s aggressive US$500 million cost reduction drive led to a massive shrinkage in losses. Losses for the quarter was slashed from US$320.4 million to US$98.1 million. Meanwhile, revenue increased 4 percent year-on- year to US$2.5 billion from US$2.4 billion, with growth seen at both liner and logistics business segment. For the full-year ended 31 December 2012, revenue rose 3.3 percent to US$9.5 billion while losses were pared from US$478.2 million in FY11 to US$419.4 million, mainly due to a first quarter net loss (before non-recurring items) of US$255 million and one-time charges of US$108 million.
Significance: While NOL will continue to look for efficiency on the cost-side, the company is also working on improving its customer mix on the revenue side, and will grow its logistics business.

Fewer Ship Deliveries Weigh On Yangzijiang’s 4Q12 Results
Fewer ship deliveries from Yangzijiang Shipbuilding (Holdings) yards dragged fourth quarter earnings lower by 22.1 percent to Rmb807.7 million. A total of 12 vessels were delivered in 4Q12, compared to 14 a year ago. The original delivery schedule was affected by the cessation of four shipbuilding contracts in 4Q12. The lower volume of work also led to a 31.9 percent decline in revenue, which stood at Rmb3.6 billion. For the full year ended 31 December 2012, revenue was down 5.8 percent to Rmb14.8 billion while earnings tumbled 10 percent to Rmb3.6 billion as a result of more muted shipbuilding activities. Yangzijiang delivered 51 vessels in 2012, down from 62 in 2011. The company has proposed a dividend per share of $0.05.
Significance: While Yangzijiang’s outstanding shipbuilding order book stood at a total value of US$3.4 billion, the company said it could see its order book continue to thin with more order cancellations and as ship-owners refrained from whipping out their cheque books in an oversupplied market.